Meridian Bioscience Reports Third Quarter and Nine Months Operating Results, Declares Regular Cash Dividend, and Reaffirms Fiscal 2014 Guidance | CINCINNATI--(BUSINESS WIRE)--Jul. 24, 2014--
Meridian Bioscience, Inc. (NASDAQ: VIVO) today:
-
reported fiscal 2014 third quarter and first nine months net sales of
$47.2 million and $142.1 million, respectively, flat and an increase
of 2%, respectively, from the same periods of the prior fiscal year;
-
reported third quarter operating income of $13.1 million, a decrease
of 16% from the same period of the prior fiscal year;
-
reported nine months operating income of $40.4 million, a decrease of
8% from the same period of the prior fiscal year;
-
reported third quarter net earnings of $8.8 million, or $0.21 per
diluted share, decreases of 13% compared to the fiscal 2013 third
quarter;
-
reported first nine months net earnings of $26.6 million, or $0.63 per
diluted share, decreases of 8% and 9%, respectively, compared to the
same period of fiscal 2013;
-
declared the regular quarterly cash dividend of $0.20 per share for
the third quarter of fiscal 2014 (annual indicated rate of $0.80 per
share), a 5% increase over the regular quarterly rate for fiscal 2013;
and
-
reaffirmed its current fiscal 2014 guidance of per share diluted
earnings to between $0.85 and $0.90 on net sales of $190 million to
$195 million.
FINANCIAL HIGHLIGHTS (UNAUDITED) In
Thousands, Except per Share Data
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Nine Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
|
2014
|
|
2013
|
|
% Change
|
Net Sales
|
|
|
|
|
$
|
47,212
|
|
$
|
47,108
|
|
-
|
%
|
|
|
$
|
142,140
|
|
$
|
139,724
|
|
2
|
%
|
Operating Income
|
|
|
|
|
|
13,132
|
|
|
15,699
|
|
-16
|
%
|
|
|
|
40,424
|
|
|
44,043
|
|
-8
|
%
|
Net Earnings
|
|
|
|
|
|
8,835
|
|
|
10,159
|
|
-13
|
%
|
|
|
|
26,561
|
|
|
28,882
|
|
-8
|
%
|
Diluted Earnings per Share
|
|
|
|
|
$
|
0.21
|
|
$
|
0.24
|
|
-13
|
%
|
|
|
$
|
0.63
|
|
$
|
0.69
|
|
-9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Equivalents
|
|
|
|
|
$
|
39,285
|
|
$
|
40,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital
|
|
|
|
|
|
96,507
|
|
|
88,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ Equity
|
|
|
|
|
|
161,820
|
|
|
151,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
|
|
|
178,763
|
|
|
170,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPANY COMMENTS
John A. Kraeutler, Chief Executive Officer, said, “The third fiscal
quarter was in-line with our most recently updated guidance, and
reflects the increasing complexity of the market, and an expanding
competitive climate. Our strategic growth drivers were mixed in their
contributions with the more significant increases coming from our illumigene®
molecular products, +9%, our H. pylori category, +9%, and the
Bioline molecular components business growing by 6%. Our new illumigene
Pertussis test contributed $227,000 of revenue for the quarter and is
now in use by approximately 80 customers in its first 90 days
post-launch. During the quarter we added 30 new illumigene
customers and a total of 94 new assays were installed on both new and
existing systems. Despite these highlights, our legacy C. difficile
products continued to decline gradually; new competition in the
foodborne category, somewhat exacerbated by purchasing patterns,
resulted in a 5% quarter over quarter decline; and our core Life Science
business faced a difficult year ago comparison.
“Tactically, R&D will continue to focus upon our illumigene
molecular technology platform and the expansion of its menu to include
HSV I & II and gonorrhea/chlamydia which are expected to launch in the
first half of FY 2015. In addition, we are evaluating multiple new
technologies, both molecular and non-molecular, that can expand our menu
of infectious disease tests while adding greater workflow simplicity.
Going forward we will continue investing in the global expansion of our
Life Science business which has already yielded material opportunities
in China and surrounding markets.”
William J. Motto, Executive Chairman, stated, “We are very pleased that
Dee Ellingwood has joined Meridian's Board of Directors. At Cincinnati
Children's Hospital Medical Center since 1997, Mr. Ellingwood previously
served as Senior Vice President of Planning and Business Development,
developing institutional strategy and leading organizational initiatives
to pursue the institution's vision to be the leader in improving child
health. Previously, Mr. Ellingwood served as the Vice President of
Network Development, Planning and Managed Care for Spohn Health System,
a Catholic-based integrated health system in Corpus Christi, Texas. As a
loaned executive from Cincinnati Children's Hospital Medical Center, he
is leading the Collective Impact on Health planning and processes to
establish community backbone functions and drive the initiative toward
achieving the Triple Aim of better health, better care and lower costs.
We welcome Mr. Ellingwood to our Board and look forward to his
contributions.”
CASH DIVIDEND MATTERS
The Board of Directors declared the regular quarterly cash dividend of
$0.20 per share for the third quarter ended June 30, 2014. The dividend
is of record August 4, 2014 and payable August 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 $190 million to $195 million and per share
diluted earnings to be between $0.85 and $0.90. 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 June 30, 2014, current
assets were $113.4 million compared to current liabilities of $16.9
million, resulting in working capital of $96.5 million and a current
ratio of 6.7. Cash and equivalents were $39.3 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.
INTERIM 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 interim periods of fiscal 2014 and
fiscal 2013.
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Nine Months Ended June 30,
|
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
Net sales
|
|
|
|
|
$
|
47,212
|
|
|
$
|
47,108
|
|
|
|
$
|
142,140
|
|
|
$
|
139,724
|
|
Cost of sales
|
|
|
|
|
|
17,970
|
|
|
|
16,477
|
|
|
|
|
53,298
|
|
|
|
49,554
|
|
Gross profit
|
|
|
|
|
|
29,242
|
|
|
|
30,631
|
|
|
|
|
88,842
|
|
|
|
90,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
|
|
3,146
|
|
|
|
2,711
|
|
|
|
|
9,185
|
|
|
|
8,039
|
|
Selling and marketing
|
|
|
|
|
|
6,249
|
|
|
|
5,440
|
|
|
|
|
18,787
|
|
|
|
16,604
|
|
General and administrative
|
|
|
|
|
|
6,715
|
|
|
|
6,781
|
|
|
|
|
20,446
|
|
|
|
21,484
|
|
Total operating expenses
|
|
|
|
|
|
16,110
|
|
|
|
14,932
|
|
|
|
|
48,418
|
|
|
|
46,127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
13,132
|
|
|
|
15,699
|
|
|
|
|
40,424
|
|
|
|
44,043
|
|
Other income (expense), net
|
|
|
|
|
|
(252
|
)
|
|
|
(148
|
)
|
|
|
|
(490
|
)
|
|
|
263
|
|
Earnings before income taxes
|
|
|
|
|
|
12,880
|
|
|
|
15,551
|
|
|
|
|
39,934
|
|
|
|
44,306
|
|
Income tax provision
|
|
|
|
|
|
4,045
|
|
|
|
5,392
|
|
|
|
|
13,373
|
|
|
|
15,424
|
|
Net earnings
|
|
|
|
|
$
|
8,835
|
|
|
$
|
10,159
|
|
|
|
$
|
26,561
|
|
|
$
|
28,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per basic common share
|
|
|
|
|
$
|
0.21
|
|
|
$
|
0.25
|
|
|
|
$
|
0.64
|
|
|
$
|
0.70
|
|
Basic common shares outstanding
|
|
|
|
|
|
41,478
|
|
|
|
41,304
|
|
|
|
|
41,445
|
|
|
|
41,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per diluted common share
|
|
|
|
|
$
|
0.21
|
|
|
$
|
0.24
|
|
|
|
$
|
0.63
|
|
|
$
|
0.69
|
|
Diluted common shares outstanding
|
|
|
|
|
|
42,096
|
|
|
|
41,983
|
|
|
|
|
42,114
|
|
|
|
41,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Nine Months Ended June 30,
|
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics
|
|
|
|
|
$
|
35,168
|
|
|
$
|
35,305
|
|
|
|
$
|
107,066
|
|
|
$
|
107,377
|
|
Life Science
|
|
|
|
|
|
12,044
|
|
|
|
11,803
|
|
|
|
|
35,074
|
|
|
|
32,347
|
|
|
|
|
|
|
$
|
47,212
|
|
|
$
|
47,108
|
|
|
|
$
|
142,140
|
|
|
$
|
139,724
|
|
Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostics
|
|
|
|
|
$
|
10,526
|
|
|
$
|
12,296
|
|
|
|
$
|
32,211
|
|
|
$
|
36,130
|
|
Life Science
|
|
|
|
|
|
2,676
|
|
|
|
3,543
|
|
|
|
|
8,243
|
|
|
|
8,223
|
|
Eliminations
|
|
|
|
|
|
(70
|
)
|
|
|
(140
|
)
|
|
|
|
(30
|
)
|
|
|
(310
|
)
|
|
|
|
|
|
$
|
13,132
|
|
|
$
|
15,699
|
|
|
|
$
|
40,424
|
|
|
$
|
44,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 U.S. healthcare
legislation enacted in 2010 – the Patient Protection and Affordable Care
Act, as amended by the Healthcare and Education Reconciliation Act – and
any modification or repeal of any of the provisions thereof, 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
|
 |
| |
|