UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

       [X]     Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.1934

                 For the quarterly period ended DecemberMarch 31, 2003.2004

or

       [   ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.1934

                 For the transition period from                                   to                                   .

Commission File Number:  0-23357


BIOANALYTICAL SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

INDIANA35-1345024
(State or other jurisdiction of
incorporation or organization)		(IRS Employer Identification No.)

2701 Kent Avenue
West Lafayette, IN
47906
(Address of principal executive offices)(Zip Code)
(765) 463-4527
(Registrant's telephone number,
including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes [X]     No [   ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
      Yes  [   ]      No  [X]

        As of January 31,April 30, 2004, 4,869,502 Common Sharescommon shares of the registrant were outstanding.




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PAGE     
NUMBER

PAGE
NUMBER
PART I.IFINANCIAL INFORMATION
Condensed Consolidated Financial Statements
(Unaudited):

Item 1.Condensed Consolidated Financial Statements (Unaudited):

Condensed Consolidated Balance Sheets as of
     DecemberMarch 31, 20032004 and September 30, 20033

Condensed Consolidated Statements of Operations for the
     Three Months and Six Months Ended DecemberMarch 31, 20032004 and 200220034

Condensed Consolidated Statements of Cash Flows for the
     ThreeSix Months Ended DecemberMarch 31, 20032004 and 200220035

Notes to Condensed Consolidated Financial Statements6

Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations		10

Item 3.Quantitative and Qualitative Disclosures About
Market Risk		1416

Item 4.Controls and Procedures1416


PART II.OTHER INFORMATION

Item 4.Submission of Matters to Vote of Security Holders17

Item 6.Exhibits and Reports on Form 8-K1517

SIGNATURES1618




–  2  –

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)thousands)


(Unaudited)
March 31,
2004
September 30,
2003
(Unaudited)
December 31,
2003
September 30,
2003
Assets            
Current assets:  
Cash and cash equivalents $824  1,378  $507 $1,378 
Accounts receivable  
Trade  5,060  3,978   4,509  3,978 
Grants  13  13   13  13 
Unbilled revenues and other  717  954   844  954 
Inventories  2,203  2,055   1,925  2,055 
Deferred income taxes  465  465   465  465 
Refundable income taxes  137  84   467  84 
Prepaid expenses  567  397   724  397 
Total current assets  9,986  9,324   9,454  9,324 
Property and equipment, net  32,096  31,171   32,347  31,171 
Goodwill  1,502  984   1,499  984 
Intangible assets, net  2,715  2,778   2,589  2,778 
Debt issue costs  409  428   399  428 
Other assets  353  300   364  300 
Total assets $47,061 $44,985  $46,652 $44,985 
Liabilities and shareholders' equity  
Current liabilities:  
Accounts payable $3,046 $3,073  $3,097 $3,073 
Accrued expenses  1,371  1,245   1,418  1,245 
Customer advances  1,926  1,658   3,100  1,658 
Revolving line of credit  3,286  2,388   2,270  2,388 
Current portion of capital lease obligation  159  123   120  123 
Current portion of long-term debt  777  1,132   788  1,132 
Total current liabilities  10,565  9,619   10,793  9,619 
Capital lease obligation, less current portion  122  —   101  --- 
Long-term debt, less current portion  6,957  6,949   6,850  6,949 
Construction line of credit  2,250  1,676   2,250  1,676 
Subordinated debt, long-term  5,188  5,188   5,188  5,188 
Deferred income taxes  2,252  1,827   2,252  1,827 
Shareholders equity: 
Preferred Shares: 
Authorized shares - 1,000,000 
Shareholders' equity: 
Preferred shares: Authorized shares - 1,000, 
Issued and outstanding shares - none  —  —   ---  --- 
Common Shares: 
Authorized shares - 19,000,000 
Issued and outstanding shares - 4,869,502 at December 31, 2003 
and 4,831,460 at September 30, 2003  1,177  1,168 
Common shares: Authorized shares - 19,000, 
Issued and outstanding shares - 4,870 at March 31, 2004 
and 4,831 at September 30, 2003  1,177  1,168 
Additional paid-in capital  11,263  11,122   11,263  11,122 
Retained earnings  7,368  7,498   6,865  7,498 
Accumulated other comprehensive loss  (81) (62)  (87) (62)
Total shareholders' equity  19,727  19,726   19,218  19,726 
Total liabilities and shareholders' equity $47,061 $44,985  $46,652 $44,985 

See accompanying notes to condensed consolidated financial statements.





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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)


Three Months Ended
March 31,
Six Months Ended
March 31,
Three Months Ended December 31,
2004
2003
2004
2003
2003
2002
Service revenue  $5,978 $4,532   $5,608 $4,564 $11,586 $9,096 
Product revenue  2,799  2,442   3,042  2,386  5,841  4,828 
Total revenue  8,777  6,974   8,650  6,950  17,427  13,924 
Cost of service revenue  5,059  3,255   5,217  3,721  10,276  6,976 
Cost of product revenue  1,083  1,034   1,229  972  2,312  2,006 
Total cost of revenue  6,142  4,289   6,446  4,693  12,588  8,982 
Gross profit  2,635  2,685   2,204  2,257  4,839  4,942 
Operating expenses:  
Selling  626  758   665  884  1,291  1,642 
Research and development  246  368   295  323  541  691 
General and administrative  1,847  1,090   1,785  1,197  3,632  2,287 
Total operating expenses  2,719  2,216   2,745  2,404  5,464  4,620 
Operating income (loss)  (84) 469   (541) (147) (625) 322 
Interest income  1  1   2  1  3  2 
Interest expense  (207) (110)  (207) (138) (414) (248)
Other income  16  29 
Gain on sale of property and equipment  —  37 
Other income (expense)  2  30  18  59 
Gain (loss) on sale of property and equipment  ---  (5) ---  32 
Income (loss) before income taxes  (274) 426   (744) (259) (1,018) 167 
Income tax expense (benefit)  (144) 151 
Income taxes  (241) (92) (385) 59 
Net income (loss) $(130)$275  $(503)$(167)$(633)$108 
Net income (loss) per share 
Net income (loss) per share: 
Basic $(0.03)$0.06  $(0.10)$(0.04)$(0.13)$0.02 
Diluted $(0.03)$0.06  $(0.10)$(0.04)$(0.13)$0.02 
Weighted average common shares outstanding 
Weighted common and common equivalent 
shares outstanding: 
Basic  4,831,874  4,579,034   4,870  4,601  4,851  4,590 
Diluted  4,831,874  4,636,591   4,870  4,601  4,851  4,619 

See accompanying notes to condensed consolidated financial statements.




– 

4  –

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)


Three Months Ended December 31,
Six Months Ended March 31,
2003
2002
2004
2003
Operating activities          
Net income (loss) $(130)$275  $(633)$108 
Adjustments to reconcile net income (loss) to net  
cash used by operating activities: 
cash provided by operating activities: 
Depreciation and amortization  829  569   1,617  1,155 
Gain on sale of property and equipment  —  (37)  ---  (32)
Deferred income taxes  (93) 51   (93) (124)
Changes in operating assets and liabilities:  
Accounts receivable  (845) (551)  (421) (234)
Inventories  (148) 43   130  208 
Prepaid expenses and other assets  (288) (119)  (735) 86 
Accounts payable  (27) (418)  24  (592)
Income taxes payable  —  (45)  ---  (101)
Accrued expenses  126  (161)  173  (137)
Customer advances  268  (85)  1,442  (83)
Net cash used by operating activities  (308) (478)
Net cash provided by operating activities  1,504  254 
Investing activities  
Capital expenditures  (1,351) (2,571)  (2,229) (3,217)
Proceeds from sale of property and equipment  —  859   ---  892 
Payments for purchase of net assets from LC Resources, Inc. net of cash  —  (163)
Payments for purchase of net assets from LC Resources, Inc. net of cash acquired  ---  (163)
Loans to PharmaKinetics Laboratories, Inc.  —  (375)  ---  (517)
Deferred acquisition costs for PharmaKinetics Laboratories, Inc.  —  (85)  ---  (239)
Net cash used by investing activities  (1,351) (2,335)  (2,229) (3,244)
Financing activities  
Borrowings on line of credit  3,611  3,826   6,705  3,826 
Payments on line of credit  (2,713) (3,635)  (6,823) (4,428)
Borrowings on construction line of credit  574  2,654   574  3,179 
Payments on capital lease obligations  (69) (928)  (130) (998)
Borrowings of long-term debt, net of issuance costs  —  5,110   ---  4,950 
Payments of long-term debt  (196) (3,448)  (293) (3,515)
Net proceeds from the exercise of stock options  —  19   ---  39 
Net cash provided by financing activities  1,207  3,598   33  3,053 
Effects of exchange rate changes  (102) 1   (179) --- 
Net increase (decrease) in cash and cash equivalents  (554) 786   (871) 63 
Cash and cash equivalents at beginning of period  1,378  826   1,378  826 
Cash and cash equivalents at end of period $824 $1,612  $507 $889 

See accompanying notes to condensed consolidated financial statements.




– 

5  –

BIOANALYTICAL SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


1.        Description of the Business and Basis of Presentation

Bioanalytical Systems, Inc. and its subsidiaries (the(“We,” the “Company” or “BASi”) engage in laboratory services and consultingother services related to pharmaceutical development. The CompanyWe also manufacturesmanufacture scientific instruments for medical research. The Company also sells its equipment andresearch, which we sell with related software for use in industrial, governmental and academic laboratories. The Company’sOur customers are located throughout the world.

TheWe have prepared the accompanying unaudited interim condensedconsolidatedcondensed consolidated financial statements are unaudited, and have been prepared by BASi pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”) for complete consolidated financial statements,, and therefore these consolidated financial statements should be read in conjunction with the Company’sour audited consolidated financial statements, and the notes thereto, for the year ended September 30, 2003. In the opinion of management, the condensed consolidated financial statements for the three and six months ended DecemberMarch 31, 20032004 and 20022003 include all adjustments which are necessary for a fair presentation of the results of the interim periods.periods and of our financial position at March 31, 2004. The results of operations for the three and six months ended DecemberMarch 31, 20032004 are not necessarily indicative of the results for the year ending September 30, 2004.

All amounts in the condensed consolidated financial statements and the notes thereto are presented in thousands, except for per share data or where otherwise noted.

2.        Stock Based Compensation

At June 30, 2003, BASiMarch 31, 2004, we had four stock-based employee compensation plans, which are described more fully in Note 9 in the Notes to the Consolidated Financial Statements of BASi included on BASi’sin our Form 10-K for the year ended September 30, 2003. BASi accounts for these plans under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and related Interpretations. No stock-based employee compensation cost is reflected in the net income of BASi, asBecause all options granted under these plans had an exercise price equal to the market value of the underlying common stock on the date of grant.grant, we do not recognize any stock-based employee compensation cost in our financial statements. The following table illustrates the effect on net income (loss) and earnings (loss) per share if BASi, for the three months ended December 31, 2003, had we applied the fair value recognition provisionsalternative treatment of Financial Accounting Standards Board (“FASB”) Statement No. 123, “Accounting for Stock-Based Compensation”, torecognizing costs as stock-based employee compensation (in thousand except per share data).compensation.

20032002
Net income (loss) as reported  $(130)$275 
Deduct: Total stock-based employee  
compensation expense determined under the  
fair value based method for all awards,  
net of related tax effects   (6) (5)
Pro forma net income (loss)  $(136)$270 
Earnings (loss) per share:  
   Basic and diluted - as reported  $(0.03)$0.06 
   Basic and diluted - pro forma  $(0.03)$0.06 

Three Months Ended
March 31,
Six Months Ended
March 31,
2004
2003
2004
2003
Net income (loss) as reported  $(503)$(167)$(633)$108 
Deduct: Total stock-based employee  
compensation expense determined under the  
fair value based method for all awards,  
net of related tax effects   (16) (5) (22) (10)
Pro forma net income (loss)  $(519)$(172)$(655)$98 
Earnings (loss) per share:  
   Basic and diluted - as reported  $(0.10)$(0.04)$(0.13)$0.02 
   Basic and diluted - pro forma  $(0.11)$(0.04)$(0.14)$0.02 

3.        Earnings per Share

BasicWe compute basic earnings per share is computed on the basis ofusing the weighted average number of common shares outstanding. DilutedWe compute diluted earnings per share is computed on the basis ofusing the weighted average number of common and common equivalent shares outstanding. Common equivalent shares include the dilutive effect of employee and directorshares issuable upon exercise of options to purchase common shares, convertible preferred shares, andshares. Shares issuable upon conversion of convertible subordinated debt which are assumed to be converted. The convertible subordinated debt washave not been included as they were not dilutive.




– 

6  –

3.    Earnings per Share (continued)

The following table reconciles both the numerator and the denominatorour computation of the basic earnings per share computation to the numerator and the denominator of the diluted earnings per share from continuing operations computation for the three months ended December 31:share:

20032002
Shares:      
Basic shares   4,831,874  4,579,034 
  Effect of dilutive securities  
    Options   —  57,557 
    Convertible subordinated debt   —  — 
Diluted shares   4,831,874  4,636,591 
 
Basic and diluted net income (loss)  $(130,000)$275,000 
 
Basic earnings (loss) per share  $(0.03)$0.06 
Diluted earnings( loss) per share  $(0.03)$0.06 

Three Months Ended
March 31,
Six Months Ended
March 31,
2004
2003
2004
2003
Shares:          
Basic shares   4,870  4,601  4,851  4,590 
  Effect of dilutive securities  
    Options   ---  ---  ---  29 
    Convertible subordinated debt   ---  ---  ---  --- 
Diluted shares   4,870  4,601  4,851  4,619 
 
Basic and diluted net income (loss)  $(503)$(167)$(633)$108 
 
Basic earnings (loss) per share  $(0.10)$(0.04)$(0.13)$0.02 
Diluted earnings (loss) per share  $(0.10)$(0.04)$(0.13)$0.02 

4.        New Accounting Pronouncement

In January 2003, the FASB issued FIN 46, “Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin (“ARB”) No. 51.” FIN 46 requires a variable interest entity (“VIE”) to be consolidated by the primary beneficiary of the entity under certain circumstances. FIN 46 is effective for all new VIEs created or acquired after January 31, 2003. For VIEs created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period beginning after December 15, 2003. Based on its review of its interests in other entities, the adoption of FIN 46 did not have an impact on the Company’s financial position or results of operations.

5.    Acquisitions

LC Resources, Inc.

On December 13, 2002 the Companywe acquired LC Resources, Inc. (“LCR”), now BASi Northwest Laboratories, Inc. The Company purchased, purchasing all of the outstanding shares of LCR for $1,998,847.$1,999. The purchase price consisted of cash payments of $198,847$199 and issuance of $1.8 million$1,800 in 10% subordinated notes payable. The CompanyWe engaged an independent valuation firm to determine the fair value of identifiable intangible assets required to be accounted for apart from goodwill.assets. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands):acquisition:

Current assets  $639 
Property and equipment   347 
Intangible assets   1,251 
Goodwill   561 
Total assets acquired   2,798 
 
Liabilities assumed   (799)
Net assets acquired  $1,999 

As of December 31, 2003 the Companywe recorded a deferred tax liability in the amount of $517,721with$518 with a corresponding adjustment toincrease in goodwill. The intangible assets arising from this transaction include $180,000$180 assigned to methodologies, $359,000$359 assigned to customer relationships and $712,000$712 assigned to the regulated facility/FDA compliant laboratory site, an indefinite lived asset. The Companysite. We estimated the economic useful lives of the acquired methodologies and customer relationships to be 5 years, amortized using the straight-line method,amortization, and determined that the acquired regulated facility/FDA compliant laboratory site is an indefinite-lived intangible asset not subject to amortization.




– 

7  –

5.    Acquisitions (continued)

PharmaKinetics Laboratories, Inc.

On May 26, 2003, we converted our $791 of convertible notes of PharmaKinetics Laboratories, Inc. (“PKLB”) became a majority owned subsidiary through the conversion of $791,000 in convertible notes receivable tointo 4,992,300 shares of PKLB common stock, representing a 67% interest.ownership interest in PKLB. On June 30, 2003, we purchased the Company completed its acquisitionremaining common stock and all preferred stock of PKLB through the exchange of approximately 228,857 shares of the Company’s common stock valued at $1,178,614 for all of the outstanding common stock and Class B preferred stock of PKLB,$1,179 and the issuance of $4,000,000$4,000 of 6% convertible notes payable due 2008 for all of PKLB’s Class A redeemable preferred stock.2008. These notes plus any accrued interest are convertible into approximately 250,000 shares of the Company’s common stock at the holder’s option any time after June 1, 2004 at the conversion rate of sixteen dollars per share of our common stock.

The Company paid cash aggregating $1,505,886$1,506 representing acquisition costs and cash advances made to PKLB from June 2002 through May 2003. PKLB was a publicly traded company based in Baltimore, Maryland, andthat provides clinical research and development services to the pharmaceutical and biotechnology industries in the development of prescription and non-prescription drug products. PKLB has been renamed BASi Maryland, Inc.

This acquisition was accounted for using the purchase method of accounting as required by Statement of Financial Accounting Standards No. 141, “Business Combinations.” The purchase price has been allocated based on the estimated fair values of the assets and liabilities acquired. The purchase price has been preliminarily allocated as followsfollows:

Current assets  $626 
Property and equipment   6,321 
Intangible assets   1,579 
Goodwill   55 
Total assets acquired   8,581 
 
Liabilities assumed   (1,896)
Net assets acquired  $6,685 

During the fiscal quarter March 31, 2004, we recorded adjustments from our earlier estimates to reduce deferred revenue at the acquisition date by $189, record taxes on the revaluation of the basis of property of $86, and is subject to change (in thousandsrecord acquisition costs of dollars):$48, resulting in reductions of intangible assets of $64 and goodwill of $4.

Current assets  $626 
Property and equipment   6,321 
Intangible assets   1,643 
Goodwill   59 
Total assets acquired   8,647 
 
Liabilities assumed   (1,962)
Net assets acquired  $6,685 

Of the $1,643,095$1,579 in preliminary value of the acquired intangible assets, $236,477$227 was assigned to methodologies, $471,593$453 was assigned to customer relationships and $935,025$899 has been assigned to the regulated facility/FDA compliant laboratory site. The CompanyWe estimated the economic useful lives of the acquired methodologies and customer relationships to be 5 years, and amortized using the straight-line method,amortization, and determined that the acquired regulated facility/FDA compliant laboratory site is an indefinite-lived intangible asset not subject to amortization.

The Company’sOur estimate of fair values and allocation of the purchase price is preliminary and subject to change pending the final valuation, to be determined with the assistance of the independent valuation firm the Company haswe engaged. Accordingly, we may revise the carrying value of assets subject to amortization and theirthe related estimated useful economic useful lives may change.lives.

6.        Inventories

Inventories consisted of the following (in thousands):following:

December 31,
2003
September 30,
2003
March 31,
2004
September 30,
2003
Raw materials  $1,160 $1,161   $1,020 $1,161 
Work in progress  327  338   288  338 
Finished goods  818  658   719  658 
  2,305  2,157   2,027  2,157 
Less LIFO reserve  (102) (102)  (102) (102)
 $2,203 $2,055  $1,925 $2,055 




–  8  –

7.        Segment Information

The Company operatesWe operate in two principal segments — research services and research products. The Company’s services unitOur Services segment provides research and development support on a contract basis directly to pharmaceutical companies. The Company’s analytical products unitOur Products segment provides liquid chromatography, electrochemical and physiological monitoring products to pharmaceutical companies, universities, government research centers and medical research institutions. The Company evaluates performance and allocates resources based on these segments. TheOur accounting policies ofin these segments are the same as those described in the summary of significant accounting policies.

The following table presents required segment information (in thousands):operating results by segment:

Three Months Ended
December 31,
2003
2002
Operating income (loss):      
Services  $(710)$382 
Products   626  87 
Total operating income (loss)   (84) 469 
Corporate expenses   (190) (43)
Income (loss) before income taxes  $(274)$426 

Three Months Ended
March 31,
Six Months Ended
March 31,
2004
2003
2004
2003
Operating income (loss):          
Services  $(1,035)$(189)$(1,745)$193 
Products   494  42  1,120  129 
Total operating income (loss)   (541) (147) (625) 322 
Corporate expenses   (203) (112) (393) (155)
Income (loss) before income taxes  $(744)$(259)$(1,018)$167 

8.        Related Party Transactions

Prior to the acquisition of PKLB in June 2003, a current director of the Company andwho had been a former director of PKLB made loans to PKLB to support their cash needs under the terms of a $350,000$350 convertible promissory note (“Old Note”) dated November 22, 2002. On December 31, 2003, the Company issued a $350,000$350 8% new convertible note payable (“New Note”) in exchange for the Old Note. The New Note was convertible into the Company’s common shares at a price based upon the market price of the common shares at or about the time of the conversion and was scheduled to mature on June 1, 2005. On that same day, the Company prepaid $100,000$100 of the outstanding principal amount of the New Note, plus approximately $31,000$31 in accrued interest, and the holder converted $150,000$150 of the New Note into 38,04238 of the Company’s common shares. Following the prepayment and conversion, theThe Company issued the holder a new 8% note due June 1, 2005, on substantially the same terms as the New Note, for the remaining $100,000$100 principal amount.




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9  –

ITEM 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Form 10-Q may contain “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and/or Section 21E of the Securities Exchange Act of 1934, as amended. Those statements may include, but are not limited to, discussions regarding BASi’s intent, belief or current expectations with respect to (i) BASi’s strategic plans; (ii) BASi’s future profitability; (iii) BASi’s capital requirements; (iv) industry trends affecting the Company’s financial condition or results of operations; (v) the Company’s sales or marketing plans; or (vi) BASi’s growth strategy. Investors in BASi’s Common Shares are cautioned that reliance on any forward-looking statement involves risks and uncertainties, including the risk factors contained in Exhibit 99.1 to BASi’s annual report on Form 10-K for the year ended September 30, 2003. Although the Company believes that the assumptions on which the forward-looking statements contained herein are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based upon those assumptions also could be incorrect. In light of the uncertainties inherent in any forward-looking statement, the inclusion of a forward-looking statement herein should not be regarded as a representation by the Company that BASi’s plans and objectives will be achieved.

GENERAL

The business of Bioanalytical Systems, Inc. is very much dependent on the level of pharmaceutical and biotech companies’ efforts in new drug discovery and approval. Our Services segment is the direct beneficiary of their efforts, through their outsourcing of laboratory and analytical needs, and our Products segment is the indirect beneficiary, as increased drug development leads to capital expansion providing opportunities to sell the equipment we produce and the consumable supplies we provide that support our products.

Developments within the industries we serve have a direct, and sometimes material, impact on our operations. One significant development in the past decade has been the continuing consolidation among large pharmaceutical corporations. We believe that, on the whole, this consolidation should have a positive impact on our business, as these increasingly larger pharmaceutical companies will devote their internal resources, our main competitor, to only those drug candidates with the potential to have a material impact on their operations, and will outsource more of their lesser opportunities. Additionally, many drug candidates will not meet the financial hurdles established by the major pharmaceutical companies, and will be developed by smaller, specialty pharmaceutical companies that do not possess internal capabilities to test and analyze the drug candidate, or have the capability to scientifically monitor the product once approved. Offsetting those potential positive impacts, the major pharmaceutical companies tend to reevaluate their development programs after major acquisitions, which sometimes causes them to defer, or cancel, work that we were scheduled to perform. We are also at risk that a significant client for us may be acquired by a corporation that prefers to perform the work internally, or has a long-standing relationship with one of our competitors. We do not anticipate that the pending acquisition of Aventis by Sanofi-Synthelabo will have any impact on our operations, as neither of the companies currently provides significant business for us. We anticipate that as companies in our markets consolidate, our competitors will also consolidate, which will result in fewer, but much stronger, competitors for our business.

Two very significant demographic developments are impacting pharmaceutical companies, and therefore, our markets. The first is the well-documented aging of Western populations, with the incident increase of diseases associated with aging and the increasing periods of treatment. The other is the so-called genomic era, where the knowledge of the genome, including human and other organisms, is spawning the technologies and investment to develop additional therapies. We believe that both will positively impact our markets by increasing the amount of drug development and monitoring activity.

Research and analytical services are capital intensive. The investment in equipment and facilities to serve our markets is substantial and continuing. While our physical facilities are excellent to meet market needs for the near term, rapid changes in automation, precision, speed and technologies necessitate a constant investment in equipment and software to meet market demands. Our ability to generate capital to reinvest in our capabilities, both through operations and financial transactions, is critical to our success. While we are currently committed to fully utilizing recent additions to our capacity, sustained growth will require additional investment in future periods.




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One of the more important factors in our profitability is the utilization of our capacity. In the past two years, we have added significant new capacity through acquisitions in Baltimore, Maryland and McMinville, Oregon, and through facility expansions in West Lafayette and Evansville, Indiana. These expansions created a higher level of basic operating expenses. Those related to productive capacity are included in cost of services. As a result, after expansion, while we are developing the sales to fill these facilities, our percentage margins on services have declined because many of these costs are the same as they will be at full capacity, but are being spread over less-than-capacity revenues. While the capacity and capabilities added have the potential to positively impact future operating results, their costs have had a negative impact in the current quarter and six months.

RESULTS OF OPERATIONS

The following table summarizes the consolidated statement of operations as a percentage of total revenues:

Three Months Ended
March 31,
Six Months Ended
March 31,
2004
2003
2004
2003
 
Service revenue   64.8 65.7 66.5 65.3
Product revenue   35.2 34.3 33.5 34.7
   Total revenue   100.0 100.0 100.0 100.0
 
Cost of service revenue (a)   93.0 81.5 88.7 76.7
Cost of product revenue (a)   40.4 40.7 39.6 41.6
   Total cost of revenue   74.5 67.5 72.2 64.5
 
Gross profit   25.5 32.5 27.8 35.5
 
Total operating expenses   31.7 34.6 31.4 33.2
 
Operating income (loss)   (6.3) (2.1) (3.6) 2.3
 
Other income (expense)   (2.4) (1.6) (2.3) (1.1)
 
Income (loss) before income taxes   (8.6) (3.7) (5.8) 1.2
 
Income tax expense (benefit)   (2.8) (1.3) (2.2) 0.4
Net income (loss)   (5.8) (2.4) (3.6) 0.8

                 (a)        Percentage of service and product revenues, respectively.

Three Months Ended DecemberMarch 31, 20032004 Compared Withto Three Months Ended DecemberMarch 31, 20022003

RevenueService and Product Revenues

Revenues for the firstsecond fiscal quarter ended DecemberMarch 31, 20032004 increased 25.9 %24% to $8.8$8.7 million compared to $7.0 million for the firstsecond quarter ended December 31, 2002.last year. Service revenue increases were the result of the Company’s two acquisitions completed in fiscal 2003. Preclinical services capacity utilization and UK basedUK-based bioanalytical services (aided by a strong pound sterling that causes U.K. revenues to translate into more U.S. dollars), showed significant improvement asfor the quarter, ended.while US-based bioanalytical services revenues were negatively impacted by the deferral of the commencement of work on a contract for which we had reserved capacity. Product revenues continuedwere essentially flat compared to be strong, driven by increasing Culex ABS sales.the prior year.


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Cost of Revenues

Cost of revenues for the second quarter ended March 31, 2004 was $6.5 million or 75% of revenue compared to $4.7 million, or 68% of revenue for the firstsecond quarter ended December 31, 2003 was $6.2 million or 70% of revenue compared to $4.3 million, or 62% of revenue for the first quarter ended December 31, 2002.last year. The increase in cost of revenuerevenues is related to the Company’s services businessServices segment and is due to the acquisitionsinclusion of costs from acquired operations in fiscal 2003 and a material loss from unreimbursed project overruns on one contract.that were not included in the prior year. The increase in cost of revenues as a percentage of revenues is impacted by operating inefficiencies in the Service segment as the Company integrates the acquired businesses, and underutilization of capacity. The costs of the underutilized capacity in our Services segment are included in costs of services, thereby reducing Services margins. The Product segment cost of revenue as a percentage of product revenue is mostly due to operating inefficiencies in the service segmentsame as the Company integrates the acquisitions. Changing site infrastructure and absorbing new job paradigms reduced productive work. The project overrun mentioned earlier, new staff in training, and lower than optimal capacity utilization at newly acquired and recently expanded facilities contributed to this increase. The Company also experienced routine inefficiencies as it began planning, training for, promoting, acquiring and managing new business development across new operating units.. The product segment cost of revenue increased slightly but as a percentage of product revenue decreased over the prior year quarter due to a higher margin product mix.last year.




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Operating Expenses

Selling expenses for the three months ended DecemberMarch 31, 20032004 decreased 17.4%24% to $626,000$665,000 from $758,000$884,000 for the three months ended DecemberMarch 31, 2002.2003. Research and development expenses, which are net of grant reimbursements, for the three months ended DecemberMarch 31, 20032004 decreased 33.2%9% to $246,000$295,000 from $368,000$323,000 for the three months ended DecemberMarch 31, 2002.2003. These decreases are primarily attributable to the Company’s efforts to control expenses.expenses through elimination or deferral of discretionary expenditures and reduction of staff.

General and administrative expenses for the three months ended DecemberMarch 31, 20032004 increased 69.4%49% to $1,847,000,$1,785,000, up from $1,090,000$1,197,000 for the three months ended DecemberMarch 31, 2002.2003. This increase is primarily attributable to the Company’s acquisitions in fiscal 2003 higher-than-planned financial audit costs, and incremental financial consulting fees incurred due to the resignation of the Company’s Chief Financial Officer as previously disclosed. Subsequent to March, 2004, we filled that position, as well as hired a controller, which should reduce consulting expenses in future periods. As the Company integrates its acquisitions, and recruits new financial management, it expectswe expect to decrease overall general and administrative costs.

Other Income (Expense)

Interest expense increased 88.2%50% to $207,000 in the three months ended DecemberMarch 31, 20032004 from $110,000$138,000 in the comparable quarter of the prior year. This increase is due to interest expense on the subordinated debt issued in connection with the Company’s 2003 acquisitions and increases in long-term debt due to facility expansions at its Evansville and West Lafayette sites.

BASi’sIncome Taxes

We computed our tax benefit using an effective tax rate for the three months ended DecemberMarch 31, 2003 was 52.6%2004 of 32.4% compared to 35.4%35.5% for the three months ended DecemberMarch 31, 2003.

Net Income (Loss)

As a result of the above factors, we lost $503,000 ($.10 loss per share, both basic and diluted) in the quarter ended March 31, 2004, compared to a loss of $167,000 ($.04 loss per share, both basic and diluted) in the same period last year.

Six Months Ended March 31, 2004 Compared to Six Months Ended March 31, 2003

Service and Product Revenues

Revenues for the six months ended March 31, 2004 increased 25% to $17.4 million compared to $13.9 million for the six month period last year. Service revenue increases were the result of the Company’s two acquisitions completed in fiscal 2003. For the six month period, our revenues were largely impacted by the same items as in the discussion above of the second quarter.

Cost of Revenues

Cost of revenues for the six months ended March 31, 2004 was $12.6 million or 72% of revenue compared to $9.0 million, or 65% of revenue for the same period last year. The increase in cost of revenues is related to the Company’s Services segment and is due to the acquisitions in fiscal 2003. The increase in cost of revenue as a percentage of revenue is impacted by operating inefficiencies in the service segment as the Company integrates the acquired businesses, and by underutilization of capacity. We devoted significant manpower to changing site infrastructure and absorbing new job methodologies, which reduced billable work. During the first quarter of the current year, we absorbed the costs of a client project overrun, new staff in training, and lower than optimal capacity utilization. The product segment cost of revenue as a percentage of product revenue decreased over the prior year’s first six months due to a higher margin product mix.




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13

Operating Expenses

Selling expenses for the six months ended March 31, 2004 decreased 21% to $1,291,000 from $1,642,000 for the six months ended March 31, 2003. Research and development expenses, which are net of grant reimbursements, for the six months ended March 31, 2004 decreased 22% to $541,000 from $691,000 for the six months ended March 31, 2003. As described in the three month discussion above, these decreases are primarily attributable to the Company’s efforts to control expenses.

General and administrative expenses for the six months ended March 31, 2004 increased 59% to $3,632,000, up from $2,287,000 for the six months ended March 31, 2003. The principal reasons for this increase are the same as those discussed above for the current quarter.

Other Income (Expense)

Interest expense increased 67% to $414,000 in the six months ended March 31, 2004 from $248,000 in the comparable quarter of the prior year. This increase is due to interest expense on the subordinated debt issued in connection with the Company’s fiscal 2003 acquisitions and increases in long-term debt due to facility expansions at its Evansville and West Lafayette sites.

Income Taxes

The effective tax rate we used in computing our tax benefit for the six months ended March 31, 2004 was 37.8% compared to 35.3% for the provision for the six months ended March 31, 2003.

Net Income (Loss)

As a result of the above, we experienced a net loss of $633,000 ($.13 loss per share, both basic and diluted) for the first six months of the current year, compared to net income in the prior year of $108,000 ($.02 income per share, both basic and diluted).

The Company discloses earnings before interest, taxes, depreciation and amortization (EBITDA), which is not a measure of performance calculated in accordance with generally accepted accounting principles (GAAP) in the United States. The Company has presented this to supplement GAAP measures because management believes it to be an indicator of operating health of the Company. EBITDA should not be considered in isolation or as an alternative to net income (loss), cash flows from operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. Because EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, the benchmarks presented may not be comparable to other similarly titled measures of other companies. EBITDA for the first fiscalsecond quarter ended DecemberMarch 31, 2004 and 2003 was $0.8$0.3 million compared to $1.1$0.5 million, respectively, and $1.0 million and $1.6 million for the comparable quartersix months ended DecemberMarch 31, 2002.2004 and 2003, respectively.

Set forth below is a reconciliation of the Company’s GAAP net income (loss) to EBITDA (in thousands):

Three Months Ended
December 31,
2003
2002
Net income (loss)  $(130)$275 
Interest expense   207  110 
Income tax expense (benefit)   (144) 151 
Depreciation and amortization   829  569 
EBITDA  $762 $1,105 

Three Months Ended
March 31,
Six Months Ended
March 31,
2004
2003
2004
2003
 
Net income (loss)  $(503) $(167)$(633)$108 
Interest expense   207  138  414  248 
Income tax expense (benefit)   (241) (92) (385) 59 
Depreciation and amortization   789  586  1,618  1,155 
 
EBITDA  $252 $465 $1,014 $1,570 



14

LIQUIDITY AND CAPITAL RESOURCES

Comparative Cash Flow Analysis

Since its inception, BASi’s principal sources of cash have been cash flow generated from operations and funds received from bank borrowings and other financings. At DecemberMarch 31, 2003,2004, BASi had cash and cash equivalents of $824,000,$507,000, compared to cash and cash equivalents of $1,378,000 at September 30, 2003. The decrease in cash resulted primarily from payments for capital expenditures to and to support the operations of the recently acquired Baltimore clinical research unit.

BASi’s net cash usedprovided by operating activities was $308,000$1,504,000 for the threesix months ended DecemberMarch 31, 2003.2004. Cash usedprovided by operations during the threesix months ended DecemberMarch 31, 20032004 consisted of net losses of $130,000,$633,000, offset by non-cash charges of $829,000$1,524,000 and a net decrease of $1,007$613,000 in operating assets and liabilities. During the current six month period, we received significant customer advance payments for work begun in April, which contributed $1,442,000 to cash flow. In addition to funding the Baltimore clinical research unit, the other driving factors that consumed cash from operations although improved from the prior year’s quarter, were a reduction in the rate of receivable collections from some of the Company’s larger customers and significant shipments of its Culex ABS products in December 2003. The Company has subsequently managed to collect on most of its older past due accounts. The timing of certain prepaid expenses relating to insurance and deposits as well as payments of routine maintenance contracts also reduced the Company’s cash flow from operations during the quarter.ABS.

Cash used by investing activities decreased to $1,351,000$2,229,000 for the threesix months ended DecemberMarch 31, 20032004 from $2,335,000$3,244,000 for the threesix months ended DecemberMarch 31, 2002.2003. This decrease is due to reduced capital expenditures in the first quartersix months ending DecemberMarch 31, 2003.2004. Additionally, the Company expended cash for its acquisition of LC Resources, Inc. in December 2002 and for loans and advances to PharmaKineteticsPharmaKinetics Laboratories, Inc. (“PKLB”), which was acquired in June 2003.

Cash provided by financing activities for the threesix months ended DecemberMarch 31, 20032004 was $1,207,000,$33,000 due to additional borrowings on the revolvingfrom our construction line of credit, offset by payments on long term debt and construction line of credit.leases. In the threesix months ended DecemberMarch 31, 2002,2003, the Company refinanced its existing revolving line of credit and term loan and secured new financing for facilities expansion and improvements. Throughout fiscal 2003, BASi used these funds to finance its expansions and improvements in Evansville and West Lafayette and for other capital expenditures. As the availability from the new facilities financings was expended by late fiscal 2003, the Company began to support these expansions with available funds from operations and its revolving credit line. This resulted in negative cash flows being generated from operations. However, expansions are now complete in Evansville and nearly complete in West Lafayette and as the Company continues to integrate its new acquisitions and fill its new facilities with business, cash from operations should begin to show improvements.




–  11  –

Capital Resources

Total expenditures by BASi for property and equipment were $1,351,000$2,229,000 and $2,571,000$3,217,000 for the threesix months ended DecemberMarch 31, 20032004 and 2002,2003, respectively. Expenditures for the first quarterhalf of 20032004 include the construction of the new ADMEearly development facility in West Lafayette, accounting for the largest portion of these expenditures.expenditures, and expenditures to bring the Baltimore facility to Company standards. Capital expenditures also include the purchase of new toxicology and pathology software in the Company’s Evansville location that will improve efficiency and ensure future regulatory compliance. The software is in the validation process and is expected to be fully operational in early JuneNovember 2004. These expenditures were primarily funded by the Company’s construction line of credit and revolving line of credit. Capital investments correspond to anticipated increases in research services to be provided by BASi. BASi expects to make other investments to expand its operations through internal growth, strategic acquisitions, alliances, and joint ventures as demand and capital allow.

The Company has implemented a phased plan to improve the operations of its Baltimore clinical research unit and expects to fund the operations with cash provided from company widecompany-wide operations supplemented by its revolving line of credit. The planned improvements include renovation of the clinic, selectively updating equipment and hiring highly qualified, experienced management personnel. Improvements already completed and in process have had measurable effects on attracting new clients. Management currently anticipates that the Baltimore facility will be cash flow break even during the first quarter of fiscal 2005.

BASi’s revolving line of credit expires September 30, 2006. The maximum amount available under the terms of the agreement is $6,000,000 with outstanding borrowings limited to the borrowing base as defined in the agreement. Interest accrues monthly on the outstanding balance at the bank’s prime rate to prime rate plus 125 basis points, or at the Eurodollar rate plus 200 to 350 basis points, as elected by BASi, depending upon the ratio of BASi’s interest bearing indebtedness (less subordinated debt) to EBITDA. BASi pays a fee equal to 25 to 50 basis points, depending upon the same financial ratio, on the unused portion of the line of credit. As of DecemberMarch 31, 2003,2004, BASi had approximately $2.4$2.1 million of availability subject to limitations by its bank debt covenant ratios.




15

During 2002, the Company began expanding facilities at its site in West Lafayette, Indiana. Phase one of this facility is expected to be fully functional in Aprilthe third fiscal quarter of 2004 at a cost of $3.0$3.4 million. Phases two and three will be completed as business justifies. Construction on the West Lafayette facilities is expected to have a total cost of $4.0 million when complete. The Company funded part of this expansion by obtaining a $2,250,000 construction loan with a bank. The loan expires November 1, 2012 and requires interest payments only until completion of the project in West Lafayette, Indiana. Interest is charged at the prime rate. The Company exhausted this construction loan in the first quarter and expects to convert the $2,250,000 to a term note in AprilMay 2004. Future expenditures to complete the site will be funded by cash from operations, as new business is generated and facilities are filled, and the Company’s revolving line of credit.




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Liquidity

BASi is required to make cash payments in the future on debt and lease obligations. The following table summarizes BASi’s contractual term debt and lease obligations at DecemberMarch 31, 20032004 and the effect such obligations are expected to have on its liquidity and cash flows in future periods (amounts presented for 2004 are those items required in thousands).the final two fiscal quarters):

Fiscal Years Ending September 30,
2004
2005
2006
After
2006
Total
Fiscal Years Ending September 30,
(in thousands)
2004
2005
2006
After
2006
Total
Mortgage notes payable  $279 $390 $395 $6,171 $7,235   $183 $390 $395 $6,171 $7,139 
Subordinated debt*  401  460  360  4,467  5,688   401  460  360  4,467  5,688 
Future debt obligations**  36  69  56 ��2,089  2,250   36  69  56  2,089  2,250 
Capital lease obligations  138  84  84  —  306   62  74  80  ---  216 
Operating leases  498  529  518  274  1,819   327  529  518  274  1,648 
 $1,352 $1,532 $1,413 $13,001 $17,298 
 $1,009 $1,522 $1,409 $13,001 $16,941 

  *  Subordinated debt includes notes to related parties.

**  Future debt obligations is an estimate of payments upon the conversion in AprilMay 2004 of the current construction line of credit into a $2,250,000 mortgage note payable.

The covenants in the Company’s credit agreement requiring the maintenance of certain ratios of interest bearing indebtedness (not including subordinated debt) to EBITDA and net cash flow to debt servicing requirements may restrict the amount the Company can borrow to fund future operations, acquisitions and capital expenditures. The Company was in violation of one of the credit agreement’s financial covenants for both the first fiscal quarter ended December 31, 2003.2003 and the second fiscal quarter ended March 31, 2004. On January 8, 2004 and May 13, 2004, the banks waived compliance with this financial covenant for the twelve months ended DecemberMarch 31, 20032004 and have amended certain of the financial covenants through September 30, 2004. As a condition to these waivers, we have granted our banks a secured mortgage on our Baltimore facility.

The Company has formulatedWe have undertaken steps to improve our liquidity, operations and initiated a plan to further reducecash flow, with the objectives of reducing our debt, strengthening our financial position and improve its cash flows to better enable it to satisfy credit agreementmeeting our financial covenants. The plan includes, but is not limited to, aggressively marketing its products and services in an effort to better utilize its new capacity through a restructuredWe have reorganized our business development staff, selling the building in downtownefforts to increase new business, added information technology improvements to become more efficient, and are attempting to sell our Baltimore (as required by its credit agreement),physical facility. We are tightly monitoring and pursuing IT-driven productivity improvement. Management has also reviewedmanaging our cash flow, and modified its cash management policies and continues to monitor its cash flows and adjust its policies accordingly. Furthermorewe are not incurring new capital expenditures are being delayed until cash from operations can be used to directly fund or immediately reduce any short term financing for such expenditures.expansion.




16

Based on itsour current business activities, the Company believeswe believe cash generated from itsour operations and amounts available under itsour existing credit facilities, combined with the action plan described above, will be sufficient to fund the Company’s working capital and capital expenditure requirements for the foreseeable future and through September 30, 2004.




–  13  –

17

ITEM 3.        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

BASi’s primary market risk exposure with regard to financial instruments is changes in interest rates. The credit agreement between BASi and The Provident Bank dated October 29, 2002 bears interest at a rate of either the bank’s prime rate plus 0 to 125 basis points, or at Eurodollar rate plus 200 to 350 basis points, depending in each case upon the ratio of BASi’s interest-bearing indebtedness (less subordinated debt) to EBITDA, at BASI’sBASi’s option. BASi also has a construction loan and a commercial mortgage which bear interest at the prime rate. Historically, BASi has not used derivative financial instruments to manage exposure to interest rate changes. BASi estimates that a hypothetical 10% adverse change in interest rates would not affect the consolidated operating results of BASi by a material amount.

BASi operates internationally and is, therefore, subject to potentially adverse movements in foreign currency exchange rates. The effect of movements in the exchange rates was not material to the consolidated operating results of BASi in fiscal years 2003 and 2002. BASi estimates that a hypothetical 10% adverse change in foreign currency exchange rates would not affect the consolidated operating results of BASi by a material amount.

ITEM 4.        CONTROLS AND PROCEDURES

Based on their most recent evaluation, which was completed as of the end of the period covered by this report, BASi’s Chief Executive Officer and Chief Financial Officer believe BASi’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are effective in timely alerting BASi’s management to material information required to be included in this Form 10-Q and other Exchange Act filings except as described below.filings.

Except as indicated below, thereThere were no significant changes in the Company’s internal controls or other factors that could significantly affect those controls subsequent to the date of their evaluation, and there were no significant deficiencies or material weaknesses which required corrective action.

In connection with the work on the Company’s audited financial statements, the Company’s independent auditors informed the audit committee that a material weakness was identified in the Company’s internal control for the year ended September 30, 2003. Specifically, the independent auditors noted that the Company’s internal control failed to timely alert management of potential loan covenant noncompliance. The Company did not have procedures in place to monitor near-term future financial position and results of operations to enable it to take operational action in the event of potential loan covenant noncompliance. This condition also existed at December 31, 2003. The Company has taken measures to correct this material weakness in the form of enhancing its planning process and creating procedures to more timely identify credit agreement compliance issues.




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18

PART II — OTHER INFORMATION

ITEM 4.        SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

On February 26, 2004, the Annual Meeting of Shareholders of BASi was held at the principal executive offices of BASi. The following matters were voted on at the meeting:

MATTER:
VOTES CAST FOR:
VOTES CAST AGAINST OR
WITHHELD: (1)
Election of the directors of BASi:      
     Peter T. Kissinger, Ph.D   4,323,861  218,609 
     Ronald E. Shoup, Ph.D   4,356,902  185,568 
     Candice B. Kissinger   4,219,653  322,817 
     William E. Baitinger   4,534,788  7,682 
     Leslie B. Daniels   4,526,438  16,032 
     W. Leigh Thompson, Ph.D., M.D   4,390,491  151,981 
 
Ratification of the selection by the Board of
Directors of Ernst & Young LLP as independent
auditors of BASi for the fiscal year ending September
30, 2004		   4,526,159  3,964 
 
(1)  Includes abstentions and broker non-votes  

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K

(a)        Exhibits

Number assigned
in Regulation S-K
Item 601
Description of Exhibits

(3)3.1Second 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).

 3.2Second Restated Bylaws of Bioanalytical Systems, Inc. (incorporated by reference to Exhibit 3.2 Form 10-Q for the quarter ended December 31, 1997).

(4)4.1Specimen Certificate for Common Shares (incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-1, Registration No. 333-36429).

(10)10.1Form of Employment agreement dated March 18, 2004 with Michael R. Cox+

10.2Form of Grant of qualified stock options dated April 1, 2004 to Michael R. Cox+

10.3Form of Grant of non-qualified stock options dated April 1 to Michael R. Cox+

10.4Form of Fourth Amendment dated May 13, 2004 to Credit Agreement dated October 29, 2002 with The Provident Bank+

(31)31.1Certification of Peter T. Kissinger +




19

 31.2Certification of Michael P. SilvonR. Cox +

(32)32.1Section 1350 Certifications +

(99)99.1Risk factors (incorporated by reference to Exhibit 99.1 to Form 10-K for the year ended September 30, 2002).

+  Filed with this Quarterly Report on Form 10-Q.

+ Filed with this Quarterly Report on Form 10-Q.

(b)        Reports on Form 8-K

        Form 8-K filed October 31, 2003,furnished February 17, 2004, reporting under Item 5 "Other Events".12 “Results of Operations and Financial Condition,” relating to the Company’s announcement of its results for the year ended September 30, 2003.

        Form 8-K furnished February 17, 2004, reporting under Item 12” “Results of Operations and Financial Condition,” relating to the Company’s announcement of its results for the quarter ended December 31, 2003.

        Form 8-K furnished March 18, 2004, reporting under Items 7 & 9 “Financial Statements and Exhibits” and “Regulation FD Disclosure,” relating to the hiring of a new CFO.




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20


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized:

BIOANALYTICAL SYSTEMS, INC.



By:  /s/ PETER T. KISSINGER
Peter T. Kissinger
President and Chief Executive Officer

Date:  May 17, 2004



By:  /s/ MICHAEL R. COX
Michael R. Cox
Chief Financial Officer
(Principal Financial and Accounting Officer)

Date:  May 17, 2004



By:  /s/  PETER T. KISSINGER

Peter T. Kissinger
President and Chief Executive Officer

Date:  February 16, 2004


By:  /s/  MICHAEL P. SILVON
Michael P. Silvon
Vice President Planning and Business Development
and Interim Chief Financial Officer
(Principal Financial and Accounting Officer)

Date:  February 16, 2004




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