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Meridian Bioscience Reports Record Operating Results, Declares Regular Cash Dividend, Reaffirms Fiscal 2008 Guidance, and Comments on Fiscal 2009 Outlook

CINCINNATI--(BUSINESS WIRE)--July 17, 2008--Meridian Bioscience, Inc., Cincinnati, Ohio (NASDAQ: VIVO) today:


    --  reported record third quarter and nine-month sales of $33.1
        million and $103.2 million, respectively, increases of 11% and
        14% over the same periods of the prior fiscal year;

    --  reported record third quarter and nine-month operating income
        of $11.0 million and $32.9 million, respectively, increases of
        16% and 25% over the same periods of the prior fiscal year;

    --  reported record third quarter earnings and diluted earnings
        per share of $7.8 million and $0.19, respectively, increases
        of 22% and 19% compared with the same periods of the prior
        fiscal year on a NON-GAAP basis. (These increases exclude a
        tax benefit of $2.4 million in fiscal 2007, or $0.06 per
        diluted share, which is discussed below.);

    --  reported record nine-month earnings and diluted earnings per
        share of $22.5 million and $0.55, respectively, increases of
        26% and 25% compared with the same periods of the prior fiscal
        year on a NON-GAAP basis. (These increases exclude a tax
        benefit of $2.4 million in fiscal 2007, or $0.06 per diluted
        share, which is discussed below.);

    --  declared the regular quarterly cash dividend of $0.14 per
        share (indicated annual rate of $0.56 per share), 27% higher
        than the regular quarterly rate of fiscal 2007;

    --  reaffirmed its guidance of net sales between $140 million and
        $142 million and per share-diluted earnings between $0.72 and
        $0.75 for the fiscal year ending September 30, 2008; and

    --  expects continued double-digit sales and earnings growth for
        fiscal 2009, initial guidance to be provided by mid-August.

                         FINANCIAL HIGHLIGHTS
                 In Thousands, Except per Share Data
----------------------------------------------------------------------

                        Three Months June 30,   Nine Months June 30,
                         2008    2007   Change   2008    2007   Change
                        ----------------------------------------------
Net sales               $33,068 $29,763    11% $103,164 $90,577    14%
Operating income         10,999   9,488    16%   32,930  26,395    25%

NON-GAAP net earnings
 and diluted earnings
 per share excluding
 tax benefit -
   Net earnings          $7,763  $6,389    22%  $22,518 $17,852    26%
   Diluted earnings per
    share                 $0.19   $0.16    19%    $0.55   $0.44    25%

Net earnings - U.S.
 GAAP                     7,763   8,814   -12%   22,518  20,277    11%
Diluted earnings per
 share - U.S. GAAP        $0.19   $0.22   -14%    $0.55   $0.50    10%

Cash and short-term
 investments            $47,050 $46,006
Working capital          79,921  72,966
Long-term debt
 obligations                  -       -
Shareholders' equity    124,374 108,384
Total assets            141,230 125,239

THIRD QUARTER AND NINE-MONTH RESULTS

Third quarter and nine-month results for fiscal 2007 include the effects of a tax benefit in the amount of $2.4 million, or $0.06 per diluted share, related to an adjustment to tax reserves that was recorded upon expiration of the statute of limitations on certain income tax returns.

Net sales for the third fiscal quarter ended June 30, 2008, were $33,068,000 as compared to $29,763,000 for the same period of the prior fiscal year, an increase of 11%. Net earnings for the third quarter of fiscal 2008 were $7,763,000, or $0.19 per diluted share, increases of 22% and 19%, respectively, over the corresponding periods of fiscal 2007, excluding the tax benefit mentioned above. Diluted common shares outstanding for the third quarter of fiscal 2008 and 2007 were 41,050,000 and 40,720,000, respectively, an increase of 1% due primarily to stock option exercises.

Net sales for the nine months ended June 30, 2008, were $103,164,000 as compared to $90,577,000 for the same period of the prior fiscal year, an increase of 14%. Net earnings for the nine months ended June 30, 2008, were $22,518,000, or $0.55 per diluted share, increases of 26% and 25%, respectively, over the corresponding periods of fiscal 2007, excluding the tax benefit mentioned above. Diluted common shares outstanding for the first nine months of fiscal 2008 and 2007 were 41,018,000 and 40,430,000, respectively, an increase of 1% due primarily to stock option exercises.

CASH DIVIDEND MATTERS

The Board of Directors declared the regular quarterly cash dividend of $0.14 per share for the third quarter ended June 30, 2008. The record date is July 30, 2008 and the dividend is payable August 7, 2008. The annual indicated cash dividend rate for fiscal 2008 is $0.56 per share, an increase of 27% over the fiscal 2007 rate of $0.44 per share. Meridian has increased its regular cash dividend rate seventeen times since it established a regular dividend eighteen years ago. Guided by the Company's policy of setting a payout ratio of between 75% and 85% of each fiscal year's expected net earnings, the actual declaration and amount of dividends will be determined by the Board of Directors in its discretion based upon its evaluation of earnings, cash flow requirements and future business developments, including acquisitions.

FISCAL 2008 GUIDANCE REAFFIRMED

For the fiscal year ending September 30, 2008, management expects net sales to be in the range of $140 million to $142 million and per share diluted earnings to be between $0.72 and $0.75.

FINANCIAL CONDITION

The Company's financial condition is sound. At June 30, 2008, current assets were $94 million compared to current liabilities of $14 million thereby producing working capital of $79.9 million and a current ratio of 6.6. Cash and short-term investments on hand were $47 million. The Company had 100% borrowing capacity under its $30,000,000 commercial bank credit facility. The Company has no long-term debt obligations.

                     UNAUDITED OPERATING RESULTS
                 In Thousands, Except per Share Data
----------------------------------------------------------------------

The following table sets forth the unaudited comparative operating
 results of Meridian Bioscience on a U.S. GAAP basis for the interim
 periods of fiscal 2008 and fiscal 2007.

                            Three Months June 30, Nine Months June 30,
                               2008       2007       2008      2007
                            --------------------- --------------------
Net sales                       $33,068   $29,763   $103,164   $90,577
Cost of goods sold               11,781    10,462     39,010    34,826
                            --------------------- --------------------
         Gross profit            21,287    19,301     64,154    55,751
                            --------------------- --------------------

Operating expenses
   Research and development       1,322     1,306      4,372     4,339
   Sales and marketing            4,459     4,072     13,697    12,331
   General and
    administrative                4,507     4,435     13,155    12,686
                            --------------------- --------------------
      Total operating
       expenses                  10,288     9,813     31,224    29,356
                            --------------------- --------------------

Operating income                 10,999     9,488     32,930    26,395
Other income (expense), net         480       364      1,304     1,169
                            --------------------- --------------------
   Income before income
    taxes                        11,479     9,852     34,234    27,564
   Income tax provision           3,716     1,038     11,716     7,287
                            --------------------- --------------------
      Net earnings               $7,763    $8,814    $22,518   $20,277
                            ===================== ====================

Net earnings per basic
 common share                     $0.19     $0.22      $0.56     $0.51
Basic common shares
 outstanding                     40,150    39,729     40,043    39,462

Net earnings per diluted
 common share                     $0.19     $0.22      $0.55     $0.50
Diluted common shares
 outstanding                     41,050    40,720     41,018    40,430
                             SEGMENT DATA
                             In Thousands
----------------------------------------------------------------------

The following table sets forth the unaudited operating segment data
 for the interim periods in fiscal 2008 and fiscal 2007.

                            Three Months June 30, Nine Months June 30,
                                2008       2007      2008       2007
                            ------------------------------------------
Net sales (third-party)
   U.S. Diagnostics             $19,406  $17,065     $64,878  $55,885
   European Diagnostics           8,016    6,279      21,709   17,808
   Life Science                   5,646    6,419      16,577   16,884
                            --------------------- --------------------
                                $33,068  $29,763    $103,164  $90,577
                            ===================== ====================
Operating Income
   U.S. Diagnostics              $8,890   $6,842     $26,669  $20,653
   European Diagnostics           1,720    1,517       4,470    3,793
   Life Science                     774    1,297       2,117    2,194
   Eliminations                    (385)    (168)       (326)    (245)
                            --------------------- --------------------
                                $10,999   $9,488     $32,930  $26,395
                            ===================== ====================

COMPANY COMMENTS

John A. Kraeutler, Chief Executive Officer, commented, "Meridian's record of double-digit revenue growth was driven by our Diagnostics businesses that continued to capture market share in our focus product areas including foodborne infections (toxigenic E. coli), H. pylori and C. difficile. Due largely to our managed care and national lab relationships, a growing proportion of physicians are adopting our H. pylori test and treat strategies for patients with gastritis. Likewise, the number of labs routinely promoting the use of Meridian's EHEC tests continues to expand, and we look forward to continued rapid growth of this product line. The early success of our TRU EBV tests, launched in Europe in April 2008, is very promising thus far. The geographic dispersion of our initial TRU EBV customers indicates broad-based acceptance of these new products. The remainder of this year will be challenging for our Life Science business unit and we are making adjustments while continuing to drive our successes in diagnostics. Even with this temporary weakness, I am confident of our guidance for fiscal 2008 and the positive outlook for 2009.

"Our disciplined financial controls continued to yield impressive gains in gross margin, operating income and net income rates. We will continue to focus our efforts on automation, operating efficiency and careful investment of resources. As we look towards the next several quarters, we are encouraged by the breadth of our business drivers and the potential from our new product pipeline. Our LAMP molecular platform is currently in beta trials, and early indications are very positive. We look forward to beginning to realize its revenue potential in fiscal 2009."

William J. Motto, Executive Chairman of the Board, commented, "Based on our current and expected run rates, fiscal 2008 will be our fifth consecutive fiscal year of record sales and earnings and double-digit growth. Naturally, we are pleased with this performance. As we look forward to fiscal 2009, the outlook appears very favorable. We do not expect the unsettled credit market, economic conditions, or political environment to have a negative impact on our business. As is our custom, we will be providing sales and earnings guidance for fiscal 2009 in August. Consistent with our well established cash dividend policy, we will likely be recommending another increase in the regular cash dividend rate to our Board of Directors following receipt of the fiscal 2008 audited financial statements. We continue to believe that cash dividends are an important element of total shareholder return and are valued by our investors. We have increased our regular cash dividend rate seventeen times during the past eighteen years. The Company is positioned to make additional acquisitions providing they meet our rigorous requirements including being accretive to per share earnings. The integration of our most recent acquisition, certain assets acquired from Vybion, Inc., is proceeding as planned. We will continue close management of expenses as we grow the business and maintain a strong balance sheet and conservative financial posture. I look forward to reporting record fiscal 2008 operating results and favorable fiscal 2009 guidance later this year."

NON-GAAP FINANCIAL MEASURES

In this press release we have provided information on net earnings, basic earnings per share, and diluted earnings per share excluding the 2007 tax benefit noted above. We believe this information is useful to an investor in evaluating our performance because:

    1. These measures help investors to more meaningfully evaluate and
        compare the results of operations from period to period by
        removing the favorable impact of a discrete material item that
        occurred in the prior year and is not expected to recur in the
        future; and

    2. These measures are used by our management for various purposes,
        including evaluating performance against incentive bonus
        achievement targets, comparing performance from period to
        period in presentations to our Board of Directors, and as a
        basis for strategic planning and forecasting.

We have provided reconciliations of net earnings, basic earnings per share and diluted earnings per share, with and without the tax benefit noted above, in the tables below for the three and nine-month periods ended June 30, 2007.

                GAAP TO NON-GAAP RECONCILIATION TABLES

                            Three Months June 30, Nine Months June 30,
Net Earnings -                 2008       2007       2008      2007
                            ------------------------------------------
   U.S. GAAP basis              $7,763    $8,814     $22,518  $20,277
   Tax benefit not expected
    to recur in the future           -    (2,425)          -   (2,425)
                            ------------------------------------------
   Excluding tax benefit        $7,763    $6,389     $22,518  $17,852
                            ==========================================

                            Three Months June 30, Nine Months June 30,
Net Earnings per Basic
 Common Share -                2008       2007       2008      2007
                            ------------------------------------------
   U.S. GAAP basis               $0.19     $0.22       $0.56    $0.51
   Tax benefit not expected
    to recur in the future           -     (0.06)          -    (0.06)
                            ------------------------------------------
   Excluding tax benefit         $0.19     $0.16       $0.56    $0.45
                            ==========================================

                            Three Months June 30, Nine Months June 30,
Net Earnings per Diluted
 Common Share -                2008       2007       2008      2007
                            ------------------------------------------
   U.S. GAAP basis               $0.19     $0.22       $0.55    $0.50
   Tax benefit not expected
    to recur in the future           -     (0.06)          -    (0.06)
                            ------------------------------------------
   Excluding tax benefit         $0.19     $0.16       $0.55    $0.44
                            ==========================================

FORWARD LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements accompanied by meaningful cautionary statements. Except for historical information, this report contains forward-looking statements which may be identified by words such as "estimates", "anticipates", "projects", "plans", "seeks", "may", "will", "expects", "intends", "believes", "should" and similar expressions or the negative versions thereof and which also may be identified by their context. Such statements, whether expressed or implied, are based upon current expectations of the Company and speak only as of the date made. The Company assumes no obligation to publicly update any forward-looking statements. These statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially, including, without limitation, the following: Meridian's continued growth depends, in part, on its ability to introduce into the marketplace enhancements of existing products or new products that incorporate technological advances, meet customer requirements and respond to products developed by Meridian's competition. While Meridian has introduced a number of internally developed products, there can be no assurance that it will be successful in the future in introducing such products on a timely basis. Ongoing consolidations of reference laboratories and formation of multi-hospital alliances may cause adverse changes to pricing and distribution. Costs and difficulties in complying with laws and regulations administered by the United States Food and Drug Administration can result in unanticipated expenses and delays and interruptions to the sale of new and existing products. Changes in the relative strength or weakness of the U.S. dollar can change expected results. One of Meridian's main growth strategies is the acquisition of companies and product lines. There can be no assurance that additional acquisitions will be consummated or that, if consummated, will be successful and the acquired businesses successfully integrated into Meridian's operations. In addition to the factors described in this paragraph, Part I, Item 1A Risk Factors of our Form 10-K contains a list of uncertainties and risks that may affect the financial performance of the Company.

Meridian is a fully integrated life science company that manufactures, markets and distributes a broad range of innovative diagnostic test kits, purified reagents and related products and offers biopharmaceutical enabling technologies. Utilizing a variety of methods, these products and diagnostic tests provide accuracy, simplicity and speed in the early diagnosis and treatment of common medical conditions, such as gastrointestinal, viral and respiratory infections. Meridian's diagnostic products are used outside of the human body and require little or no special equipment. The Company's products are designed to enhance patient well-being while reducing the total outcome costs of healthcare. Meridian has strong market positions in the areas of gastrointestinal and upper respiratory infections, serology, parasitology and fungal disease diagnosis. In addition, Meridian is a supplier of rare reagents, specialty biologicals and related technologies used by biopharmaceutical companies engaged in research for new drugs and vaccines. The Company markets its products and technologies to hospitals, reference laboratories, research centers, veterinary testing centers, physician offices, diagnostics manufacturers and biotech companies in more than 60 countries around the world. The Company's shares are traded through NASDAQ's Global Select Market, symbol VIVO. Meridian's website address is www.meridianbioscience.com.

CONTACT: Meridian Bioscience, Inc.
John A. Kraeutler, CEO, 513-271-3700
or
Melissa A. Lueke, CFO, 513-271-3700

SOURCE: Meridian Bioscience, Inc.