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Meridian Bioscience Reports Record Sales and Record First Quarter Operating Income, Declares Higher Regular Cash Dividend, and Reaffirms Fiscal 2003 Guidance


CINCINNATI--(BUSINESS WIRE)--Jan. 21, 2003--Meridian Bioscience, Inc. (Nasdaq:VIVO) today:

  • reported record quarterly net sales of $16,103,000 resulting in net earnings of $1,424,000 ($0.10 per diluted share) for the first quarter ended December 31, 2002: net sales were an all time record for any quarter in the Company's history;

  • declared a regular quarterly cash dividend of $0.09 per share, $0.02 per share higher (+29%) than the regular quarterly rate of fiscal 2002; and

  • reaffirmed its earlier guidance of sales between $64 million and $67 million and per share diluted earnings between $0.42 and $0.47 for the fiscal year ending September 30, 2003.

                         FINANCIAL HIGHLIGHTS
                  In Thousands, Except per Share Data
                                       Three Months Ended December 31

                                        2002      2001       % Change
                                        ----      ----       ---------
Net Sales                             $16,103   $13,555        +19%
Operating Income                        2,762     2,314        +19%
Net Earnings                            1,424     1,187        +20%
Earnings per Share (diluted)          $ 0.10    $ 0.08         +25%

Cash and Equivalents                  $ 4,146   $ 4,903
Working Capital                        16,289    16,039
Total Assets                           63,425    65,885
Shareholders' Equity                   24,986    23,080


Net sales for the first quarter ended December 31, 2002, were $16,103,000 as compared to $13,555,000 for the same period of the prior fiscal year, an increase of 19%. Net earnings for the first quarter of fiscal 2003 were $1,424,000 or $0.10 per diluted share, up 20% over the first quarter of fiscal 2002. EBITDA (earnings before interest, taxes, depreciation and amortization) for the first quarter just ended was $3,714,000 as compared to $3,446,000 for the same period of the prior fiscal year, an increase of 8%. Sales for the quarter were driven primarily by unit volume increases and new product launches.


The Board of Directors declared the regular quarterly cash dividend of $0.09 per share for the first quarter ended December 31, 2002. The dividend is of record February 3, 2003 and payable February 10, 2003. The annual indicated cash dividend rate for fiscal 2003 is $0.36 per share, an increase of 29% over the $0.28 per share rate for fiscal 2002. Meridian Bioscience has increased its regular dividend rate nine times since establishing a regular dividend policy eleven years ago. During November 2002, the Board of Directors adopted a new dividend policy calling for an increased payout ratio of net earnings. The most recent increase in the regular cash dividend rate is in recognition of, among other things, management's confidence in higher operating results for fiscal 2003 and strong cash flow.


Based on the Company's business planning and budgeting activities, as well as first quarter actual operating results, management continues to expect net sales to be in the range of $64 to $67 million and per share diluted earnings to be between $0.42 and $0.47 for the fiscal year ending September 30, 2003. As compared to fiscal 2002, the increase in per share earnings is expected to be between 24% and 38%. EBITDA is expected to be between $15 and $18 million for fiscal 2003.


The Company's financial condition is sound. At December 31, 2002, current assets were $29,282,000 compared to current liabilities of $12,993,000 thereby producing working capital of $16,289,000 and a current ratio of 2.25. Cash and equivalents were $4,146,000 and the Company had a borrowing capacity of $19,852,000 under its commercial bank credit facility. Long-term debt obligations were $23,612,000 compared to shareholders' equity of $24,986,000. Subordinated convertible debt of $20 million due 2006 represented 85% of the total long-term debt obligations outstanding.


William J. Motto, Chairman and Chief Executive Officer, stated, "We are very pleased with the record setting sales, and the profits achieved during the first quarter. Fiscal 2003 is off to a very good start. I can assure you that your management team has a solid plan in place for reaching our fiscal 2003 goals. I am particularly pleased at the 19% sales growth we experienced during the first quarter. Considering the Company's high gross profit margins, sales growth has a relatively large impact on overall profitability and cash flow and therefore is very important. Of course, we also must carefully control our expenses as the business grows. My focus is on making certain that we work to create shareholder value by sharing earnings through cash dividends and the attainment of higher stock price through above average sales and earnings growth."

John A. Kraeutler, President and Chief Operating Officer, commented "The business momentum we talked about in fiscal 2002 has continued to build as evidenced by our operating results for the first quarter. We continue programs of enhancing our quality systems, improving our operating efficiencies, and increasing sales. Our core diagnostics business is very strong and we look forward to reporting meaningful progress in life sciences later in the fiscal year. In particular, our Viral Antigens subsidiary is expected to secure its first customers for its new biopharmaceutical protein laboratories in the very near future."

                  In Thousands, Except per Share Data

The following table sets forth the unaudited comparative operating
results of Meridian Bioscience for the first quarter of fiscal 2003
and fiscal 2002 (in thousands, except per share data).

                                                    Three Months Ended
                                                        December 31
                                                        2002     2001
                                                     -------- --------

Net sales                                            $16,103  $13,555
Cost of goods sold                                     6,941    5,544

                                                     -------- --------
   Gross profit                                        9,162    8,011
                                                     -------- --------

Operating expenses -
   Research and development                              911      778
   Selling and marketing                               2,785    2,310
   General and administrative                          2,704    2,609
                                                     -------- --------
      Total operating expenses                         6,400    5,697
                                                     -------- --------

Operating income                                       2,762    2,314
Other income (expense)                                  (397)    (323)
                                                     -------- --------
Earnings before income taxes                           2,365    1,991
Income tax provision                                     941      804
                                                     -------- --------
   Net income                                          1,424   $1,187
                                                     ======== ========

Net earnings per basic common share                    $0.10    $0.08
Weighted average basic common shares outstanding      14,635   14,599

Net earnings per diluted share                         $0.10    $0.08
Weighted average diluted common shares outstanding    14,774   14,702


The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward looking statements accompanied by meaningful cautionary statements. These statements identify important factors that could cause actual results to differ materially from those that might be projected. 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. 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.

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 provide accuracy, simplicity and speed in the early diagnosis and treatment of common medical conditions, such as gastrointestinal, viral, urinary and respiratory infections. All Meridian 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 and specialty biologicals. The Company markets its products to hospitals, reference laboratories, research centers, veterinary testing centers and physician offices in more than 60 countries around the world. The Company's shares are traded through Nasdaq's National Market, symbol VIVO. Meridian's website address is

Meridian Bioscience, Inc.
John A. Kraeutler, 513/271-3700