CINCINNATI--(BUSINESS WIRE)--Jan. 22, 2014--
Meridian Bioscience, Inc. (NASDAQ: VIVO) today:
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reported first quarter net sales of $44.8 million, a decrease of 1%
from the same period of the prior fiscal year;
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reported first quarter operating income of $11.6 million, a decrease
of 11% from the same period of the prior fiscal year;
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reported first quarter net earnings of $7.4 million, or $0.18 per
diluted share, decreases of 12% and 10%, respectively, compared to the
fiscal 2013 first quarter;
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declared the increased regular quarterly cash dividend of $0.20 per
share for the first quarter of fiscal 2014 (indicated rate of $0.80
per share) a 5% increase over the regular quarterly rate for fiscal
2013; and
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reaffirmed its fiscal 2014 guidance of per share diluted earnings
between $0.98 and $1.03 on net sales of $203 million to $208 million.
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FINANCIAL HIGHLIGHTS (UNAUDITED) In
Thousands, Except per Share Data
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Three Months Ended December 31,
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2013
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2012
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% Change
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Net Sales
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$
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44,794
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$
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45,351
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-1
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%
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Operating Income
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11,626
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13,091
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-11
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%
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Net Earnings
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7,426
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8,474
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-12
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%
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Diluted Earnings per Share
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$
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0.18
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$
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0.20
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-10
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%
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Dec. 31
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Dec. 31
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2013
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2012
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Cash and Equivalents
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$
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43,729
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$
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33,149
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Working Capital
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93,732
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74,318
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Shareholders’ Equity
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157,370
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138,308
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Total Assets
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174,859
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157,315
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COMPANY COMMENTS
John A. Kraeutler, Chief Executive Officer, said, “The financial results
of the first quarter, as summarized in our announcement of January 15,
2014, were not up to expectations due primarily to revenue shortfalls
and higher Q1 spending. Delays in shipments, ordering patterns and a
seasonal shift in influenza negatively impacted our core Life Science,
foodborne and respiratory product categories, respectively, and are
expected to rebound during the second quarter. Further, while illumigene®
revenues increased by 15%, our molecular test for C. difficile
contributed at a lesser rate than expected. We believe one of the root
causes of this weakness is related to reduced hospital admissions and
declining disease incidence rates in hospitals. As a result, our sales
and marketing efforts are being stepped up with those products that are
more suited to testing of ambulatory patients rather than hospital
inpatients. Specifically, we are focusing on the testing of those
persons undergoing prenatal screening as well as those suffering
symptoms of upper respiratory infections and gastrointestinal distress.
“As mentioned, illumigene revenues grew by 15%. Also, our
Bioline unit achieved a 16% increase offset by a 7% decline in the core
Life Science revenues. With regard to illumigene, we saw
the greatest contributions to our sales increase coming from our tests
for Group B and for Group A streptococci. We added 21 new illumigene
customers, a similar number as compared to the same period last year,
and we added 36 new tests on installed illumipro™ systems. illumigene
Pertussis is at the FDA awaiting clearance and clinical trials for CT/NG
are to begin this quarter.
“Guidance for fiscal 2014 is being maintained. We are expecting a
rebound in revenue growth during the second quarter and we will monitor
our spending carefully.”
William J. Motto, Executive Chairman of the Board, said, “We are
disappointed that a number of factors converged during the first quarter
to negatively affect our operating results. We expect much of the lost
revenue and profits will be made up during the current quarter and
remain optimistic that fiscal 2014 will be "on plan" and consistent with
our previously issued guidance. Fiscal 2014 is expected to be another
year of growth driven by new products, increased placements and usage of
our illumigene platform, and close attention to operating
efficiency. We continue to examine acquisition opportunities as we
maintain a debt-free, strong balance sheet and follow our liberal cash
dividend policy.”
CASH DIVIDEND MATTERS
The Board of Directors declared the regular quarterly cash dividend of
$0.20 per share for the first quarter ended December 31, 2013. The
dividend is of record February 3, 2014 and payable February 14, 2014.
This annual indicated dividend rate of $0.80 per share represents a 5%
increase over the rate in fiscal 2013. 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 2014 GUIDANCE REAFFIRMED
For the fiscal year ending September 30, 2014, management expects net
sales to be in the range of $203 million to $208 million and per share
diluted earnings to be between $0.98 and $1.03. The per share estimates
assume an increase in average diluted shares outstanding from
approximately 41.9 million at fiscal 2013 year end to approximately 42.3
million at fiscal 2014 year end. The sales and earnings guidance
provided in this press release is from expected internal growth and does
not include the impact of any acquisitions the Company might complete
during fiscal 2014.
FINANCIAL CONDITION
The Company’s financial condition is sound. At December 31, 2013,
current assets were $111.2 million compared to current liabilities of
$17.5 million, resulting in working capital of $93.7 million and a
current ratio of 6.4. Cash and equivalents were $43.7 million and the
Company had 100% borrowing capacity under its $30.0 million commercial
bank credit facility. The Company has no bank-debt obligations
outstanding.
FIRST QUARTER UNAUDITED OPERATING RESULTS
(In
Thousands, Except per Share Data)
The following table sets forth the unaudited comparative results of
Meridian on a U.S. GAAP basis for the first quarters of fiscal 2014 and
fiscal 2013.
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Three Months Ended December 31,
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2013
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2012
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Net sales
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$
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44,794
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|
|
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$
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45,351
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Cost of sales
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16,787
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16,555
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Gross profit
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28,007
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28,796
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Operating expenses
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Research and development
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2,853
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2,517
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Selling and marketing
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5,978
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5,693
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General and administrative
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7,550
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7,495
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Total operating expenses
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16,381
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15,705
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Operating income
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11,626
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13,091
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Other income (expense), net
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(216
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)
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135
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Earnings before income taxes
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11,410
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13,226
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Income tax provision
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3,984
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4,752
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Net earnings
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$
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7,426
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$
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8,474
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Net earnings per basic common share
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$
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0.18
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$
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0.21
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Basic common shares outstanding
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41,408
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41,148
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Net earnings per diluted common share
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$
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0.18
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$
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0.20
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Diluted common shares outstanding
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42,099
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41,752
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The following table sets forth the unaudited segment data for the
interim periods in fiscal 2014 and fiscal 2013 (in thousands). In the
fourth quarter of fiscal 2013, we aggregated our Diagnostics operating
segments into a single reportable segment (“Diagnostics”). The prior
period information reflected below has been conformed to the current
period presentation.
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Three Months Ended December 31,
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|
|
|
|
|
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2013
|
|
|
2012
|
Net sales
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|
|
|
|
|
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Diagnostics
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$
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34,837
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$
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35,669
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Life Science
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9,957
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|
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|
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9,682
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$
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44,794
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$
|
45,351
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Operating Income
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|
|
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|
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Diagnostics
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$
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9,384
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$
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11,340
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Life Science
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|
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|
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2,261
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|
|
|
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1,634
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Eliminations
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(19
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)
|
|
|
|
117
|
|
|
|
|
|
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$
|
11,626
|
|
|
|
$
|
13,091
|
|
|
|
|
|
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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 within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, 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 or revise any
forward-looking statements even if experience or future changes make it
clear that any projected results expressed or implied therein will not
be realized. 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, and its ability to effectively sell such products. 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. Meridian relies on
proprietary, patented and licensed technologies, and the Company’s
ability to protect its intellectual property rights, as well as the
potential for intellectual property litigation, would impact its
results. Ongoing consolidations of reference laboratories and formation
of multi-hospital alliances may cause adverse changes to pricing and
distribution. Recessionary pressures on the economy and the markets in
which our customers operate, as well as adverse trends in buying
patterns from customers can change expected results. Costs and
difficulties in complying with laws and regulations, including those
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. The international scope of Meridian’s
operations, including changes in the relative strength or weakness of
the U.S. dollar and general economic conditions in foreign countries,
can impact results and make them difficult to predict. One of Meridian's
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 will be successfully integrated into Meridian's operations.
There may be risks that acquisitions may disrupt operations and may pose
potential difficulties in employee retention and there may be additional
risks with respect to Meridian’s ability to recognize the benefits of
acquisitions, including potential synergies and cost savings or the
failure of acquisitions to achieve their plans and objectives. The
Company cannot predict the possible impact of recently-enacted United
States healthcare legislation and any similar initiatives in other
countries on its results of operations. In addition to the factors
described in this paragraph, Part I, Item 1A Risk Factors of our Form
10-K contains a list and description of uncertainties, risks and other
matters that may affect the Company.
Meridian is a fully integrated life science company that develops,
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,
diagnostics manufacturers and biotech companies in more than 60
countries around the world. The Company’s shares are traded on the
NASDAQ Global Select Market, symbol VIVO. Meridian's website address is www.meridianbioscience.com.

Source: Meridian Bioscience, Inc.
Meridian Bioscience, Inc.
John A. Kraeutler, 513-271-3700
Chief
Executive Officer