News Release
Meridian Bioscience Reports Fiscal Third Quarter 2020 Operating Results – Best Quarter in Company History – Raises Full Year Guidance
Third Quarter Fiscal 2020 Highlights:
- Consolidated Net Revenue of
$84.8 million , up 75% year-over-year - Life Science segment delivers record revenue of
$63.2 million , up 312% year-over-year, as a result of strong demand for COVID-19 related products - Broadened the Life Science portfolio of COVID-19 related products to include key reagents used by diagnostics manufacturers to develop rapid antigen tests
- Diagnostics segment limited to
$21.6 million in revenue, in line with expectations and a 35% year-over-year decline, as stay-at-home orders reduced demand for non-critical care testing - Completed assay design lock in the development of a PCR COVID-19 test on the Revogene® system and expecting submission to the FDA for EUA approval this fall
- Re-initiated clinical trials for key GI products (GI panel, C. diff, Campylobacter), although at a slower-than-normal pace
- Closed the acquisition of Exalenz and the integrated commercial team placed the first BreathID® Smart System since receiving FDA approval in March
Third Quarter Fiscal 2020 Results (Comparison to Third Quarter Fiscal 2019)
Consolidated net revenue for the third quarter of fiscal 2020 increased 75% to
Reported operating income for the third quarter of fiscal 2020 was
Earnings per diluted share on a reported GAAP basis totaled
Raising Fiscal 2020 Guidance
Our performance in the third quarter exceeded our expectations and we are raising our guidance for the year.
FY2020 Net Revenues:
- Consolidated
$245 million to$250 million - Life Science
$127 million to$130 million - Diagnostics
$118 million to$120 million
FY2020 Adjusted Operating Margin: Consolidated 22% to 23%
FY2020 Adjusted Earnings Per Share on a Diluted Basis:
The revenue component of this guidance anticipates that our Life Science business will benefit from COVID-19 related demand ranging from
This guidance reflects our current visibility into market conditions and customer order patterns for our products and our current assumptions about the impacts from resurgence of COVID-19 infections in the
Financial Condition
At
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INTERIM UNAUDITED OPERATING RESULTS
(In Thousands, Except per Share Data)
The following table sets forth the unaudited comparative results of Meridian on a
Three Months Ended | Nine Months Ended | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Net revenues | $ | 84,797 | $ | 48,440 | $ | 189,514 | $ | 150,168 | ||||||
Cost of sales | 28,945 | 20,181 | 71,768 | 60,999 | ||||||||||
Gross profit | 55,852 | 28,259 | 117,746 | 89,169 | ||||||||||
Operating expenses | ||||||||||||||
Research and development | 6,743 | 4,594 | 16,953 | 12,294 | ||||||||||
Selling and marketing | 6,261 | 6,747 | 19,459 | 21,221 | ||||||||||
General and administrative | 12,439 | 8,002 | 31,675 | 24,288 | ||||||||||
Acquisition-related costs | 1,641 | 473 | 3,428 | 1,445 | ||||||||||
Change in fair value of contingent consideration obligation | (6,124 | ) | - | (7,428 | ) | - | ||||||||
Restructuring costs | 93 | 1,801 | 620 | 1,701 | ||||||||||
Selected legal costs | 134 | 178 | 1,189 | 1,370 | ||||||||||
Total operating expenses | 21,187 | 21,795 | 65,896 | 62,319 | ||||||||||
Operating income | 34,665 | 6,464 | 51,850 | 26,850 | ||||||||||
Other income (expense), net | 208 | 14 | (304 | ) | (649 | ) | ||||||||
Earnings before income taxes | 34,873 | 6,478 | 51,546 | 26,201 | ||||||||||
Income tax provision | 7,366 | 1,399 | 11,853 | 5,922 | ||||||||||
Net earnings | $ | 27,507 | $ | 5,079 | $ | 39,693 | $ | 20,279 |
Basic earnings per common share | $ | 0.64 | $ | 0.12 | $ | 0.93 | $ | 0.48 | ||||||
Basic common shares outstanding | 42,837 | 42,639 | 42,819 | 42,526 | ||||||||||
Diluted earnings per common share | $ | 0.64 | $ | 0.12 | $ | 0.92 | $ | 0.47 | ||||||
Diluted common shares outstanding | 43,273 | 42,910 | 43,038 | 42,907 |
Adjusted Financial Measures | ||||||||||||||
(see non-GAAP financial measure reconciliation below) | ||||||||||||||
Operating income | $ | 30,409 | $ | 8,916 | $ | 49,659 | $ | 31,366 | ||||||
Net earnings | 24,014 | 6,960 | 38,197 | 23,743 | ||||||||||
Diluted earnings per common share | $ | 0.55 | $ | 0.16 | $ | 0.89 | $ | 0.55 | ||||||
Condensed Balance Sheet Data
2020 | 2019 | ||||
Cash and equivalents | $ | 63,445 | $ | 55,192 | |
Working capital | 130,705 | 117,567 | |||
Long-term debt | 98,824 | 75,824 | |||
Shareholders’ equity | 233,335 | 188,553 | |||
Total assets | 419,787 | 322,436 | |||
Segment Data
The following table sets forth the unaudited revenue and segment data for the interim periods in fiscal 2020 and fiscal 2019 (in thousands), noting that “non-molecular assays” is comprised of traditional immunoassays, blood chemistry assays and urea breath assays.
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
Net Revenues - By Product Platform/Type | ||||||||||||||||||||||||||||
Diagnostics | ||||||||||||||||||||||||||||
Molecular assays | $ | 3,182 | $ | 5,894 | $ | 17,259 | $ | 20,208 | ||||||||||||||||||||
Non-molecular assays | 18,416 | 27,224 | 74,072 | 83,075 | ||||||||||||||||||||||||
21,598 | 33,118 | 91,331 | 103,283 | |||||||||||||||||||||||||
Life Science | ||||||||||||||||||||||||||||
Molecular reagents | 38,784 | 5,495 | 55,691 | 17,495 | ||||||||||||||||||||||||
Immunological reagents | 24,415 | 9,827 | 42,492 | 29,390 | ||||||||||||||||||||||||
Total Life Science | 63,199 | 15,322 | 98,183 | 46,885 | ||||||||||||||||||||||||
Total Net Revenues | $ | 84,797 | $ | 48,440 | $ | 189,514 | $ | 150,168 | ||||||||||||||||||||
Net Revenues - By Disease State/Geography | ||||||||||||||||||||||||||||
Diagnostics | ||||||||||||||||||||||||||||
Gastrointestinal assays | $ | 9,584 | $ | 17,232 | $ | 39,644 | $ | 52,024 | ||||||||||||||||||||
Respiratory illness assays | 5,052 | 5,708 | 23,664 | 21,242 | ||||||||||||||||||||||||
Blood chemistry assays | 3,364 | 4,666 | 12,508 | 13,364 | ||||||||||||||||||||||||
Other | 3,598 | 5,512 | 15,515 | 16,653 | ||||||||||||||||||||||||
21,598 | 33,118 | 91,331 | 103,283 | |||||||||||||||||||||||||
Life Science | ||||||||||||||||||||||||||||
22,015 | 4,369 | 30,642 | 14,347 | |||||||||||||||||||||||||
EMEA | 26,070 | 6,389 | 40,977 | 21,608 | ||||||||||||||||||||||||
ROW | 15,114 | 4,564 | 26,564 | 10,930 | ||||||||||||||||||||||||
Total Life Science | 63,199 | 15,322 | 98,183 | 46,885 | ||||||||||||||||||||||||
Total Net Revenues | $ | 84,797 | $ | 48,440 | $ | 189,514 | $ | 150,168 | ||||||||||||||||||||
Geographic Regions EMEA = ROW = Rest of World |
Three Months Ended | Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
OPERATING INCOME | |||||||||||||||
Diagnostics | $ | (2,731 | ) | $ | 5,731 | $ | 6,469 | $ | 22,330 | ||||||
Life Science | 40,253 | 3,639 | 53,182 | 12,906 | |||||||||||
Corporate | (2,849 | ) | (2,929 | ) | (7,832 | ) | (8,450 | ) | |||||||
Eliminations | (8 | ) | 23 | 31 | 64 | ||||||||||
Total Operating Income | $ | 34,665 | $ | 6,464 | $ | 51,850 | $ | 26,850 |
NON-GAAP FINANCIAL MEASURES
In this press release, we have supplemented our reported GAAP financial information with information on operating expenses, operating income, net earnings, basic earnings per share and diluted earnings per share excluding the effects of acquisition-related costs, a favorable change in fair value of the contingent consideration obligation, restructuring costs, and selected legal costs, each of which is a non-GAAP measure. We have provided in the tables below reconciliations to the operating expenses, operating income, net earnings, basic earnings per share and diluted earnings per share amounts reported under
We believe this information is useful to an investor in evaluating our performance because:
- These measures help investors to more meaningfully evaluate and compare the results of operations from period to period by removing the impacts of these non-routine items; and
- 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.
These non-GAAP measures may be different from non-GAAP measures used by other companies. In addition, the non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations, in that they do not reflect all amounts associated with our results as determined in accordance with
THIRD QUARTER AND NINE MONTH YEAR-TO-DATE
GAAP TO NON-GAAP RECONCILIATION TABLES
(In Thousands, Except per Share Data)
Three Months | Nine Months | ||||||||||||||
Ended |
Ended |
||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Operating Expenses - | |||||||||||||||
$ | 21,187 | $ | 21,795 | $ | 65,896 | $ | 62,319 | ||||||||
Acquisition-related costs | (1,641 | ) | (473 | ) | (3,428 | ) | (1,445 | ) | |||||||
Change in fair value of contingent consideration obligation | 6,124 | - | 7,428 | - | |||||||||||
Restructuring costs | (93 | ) | (1,801 | ) | (620 | ) | (1,701 | ) | |||||||
Selected legal costs | (134 | ) | (178 | ) | (1,189 | ) | (1,370 | ) | |||||||
Adjusted Operating Expenses | $ | 25,443 | $ | 19,343 | $ | 68,087 | $ | 57,803 | |||||||
Operating Income - | |||||||||||||||
$ | 34,665 | $ | 6,464 | $ | 51,850 | $ | 26,850 | ||||||||
Acquisition-related costs | 1,641 | 473 | 3,428 | 1,445 | |||||||||||
Change in fair value of contingent consideration obligation | (6,124 | ) | - | (7,428 | ) | - | |||||||||
Restructuring costs | 93 | 1,801 | 620 | 1,701 | |||||||||||
Selected legal costs | 134 | 178 | 1,189 | 1,370 | |||||||||||
Adjusted Operating Income | $ | 30,409 | $ | 8,916 | $ | 49,659 | $ | 31,366 | |||||||
Net Earnings - | |||||||||||||||
$ | 27,507 | $ | 5,079 | $ | 39,693 | $ | 20,279 | ||||||||
Acquisition-related costs, including gain on currency hedge of purchase price * | 959 | 363 | 2,746 | 1,108 | |||||||||||
Change in fair value of contingent consideration obligation * | (4,623 | ) | - | (5,608 | ) | - | |||||||||
Restructuring costs * | 70 | 1,381 | 468 | 1,305 | |||||||||||
Selected legal costs * | 101 | 137 | 898 | 1,051 | |||||||||||
Adjusted Earnings | $ | 24,014 | $ | 6,960 | $ | 38,197 | $ | 23,743 | |||||||
Basic Earnings per Common Share - | |||||||||||||||
$ | 0.64 | $ | 0.12 | $ | 0.93 | $ | 0.48 | ||||||||
Acquisition-related costs, including gain on currency hedge of purchase price | 0.02 | 0.01 | 0.06 | 0.03 | |||||||||||
Change in fair value of contingent consideration obligation | (0.11 | ) | - | (0.13 | ) | - | |||||||||
Restructuring costs | - | 0.03 | 0.01 | 0.03 | |||||||||||
Selected legal costs | - | - | 0.02 | 0.02 | |||||||||||
Adjusted Basic EPS ** | $ | 0.56 | $ | 0.16 | $ | 0.89 | $ | 0.56 | |||||||
Three Months | Nine Months | ||||||||||||
Ended |
Ended |
||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||
Diluted Earnings per Common Share - | |||||||||||||
$ | 0.64 | $ | 0.12 | $ | 0.92 | $ | 0.47 | ||||||
Acquisition-related costs, including gain on currency hedge of purchase price | 0.02 | 0.01 | 0.06 | 0.03 | |||||||||
Change in fair value of contingent consideration obligation | (0.11 | ) | - | (0.13 | ) | - | |||||||
Restructuring costs | - | 0.03 | 0.01 | 0.03 | |||||||||
Selected legal costs | - | - | 0.02 | 0.02 | |||||||||
Adjusted Diluted EPS *** | $ | 0.55 | $ | 0.16 | $ | 0.89 | $ | 0.55 | |||||
* Net of tax.
** Basic Earnings per Common Share for the three months ended
*** Diluted Earnings per Common Share for the nine months ended
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 “continues”, “estimates”, “anticipates”, “projects”, “plans”, “seeks”, “may”, “will”, “expects”, “intends”, “believes”, “signals”, “should”, “can” and similar expressions or the negative versions thereof and which also may be identified by their context. All statements that address operating performance or events or developments that Meridian expects or anticipates will occur in the future, including, but not limited to, statements relating to per share diluted earnings, sales, product demand, revenue, operating margin, other guidance and the impact of COVID-19 on our business and prospects, are forward-looking statements. Such statements, whether expressed or implied, are based upon current expectations of the Company and speak only as of the date made. Specifically, Meridian’s forward-looking statements are, and will be, based on management’s then-current views and assumptions regarding future events and operating performance. Meridian 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 operating results, financial condition and 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, its ability to effectively sell such products and its ability to successfully expand and effectively manage increased sales and marketing operations. While Meridian has introduced a number of internally developed products and acquired products, there can be no assurance that it will be successful in the future in introducing such products on a timely basis or in protecting its intellectual property, and unexpected or costly manufacturing costs associated with its introduction of new products or acquired products could cause actual results to differ from expectations. Meridian relies on proprietary, patented and licensed technologies. As such, 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
About
Meridian is a fully integrated life science company that develops, manufactures, markets and distributes a broad range of innovative diagnostic products. We are dedicated to developing and delivering better solutions that give answers with speed, accuracy and simplicity that are redefining the possibilities of life from discovery to diagnosis. Through discovery and development, we provide critical life science raw materials used in immunological and molecular tests for human, animal, plant, and environmental applications. Through diagnosis, we provide diagnostic solutions in areas including gastrointestinal and upper respiratory infections and blood lead level testing. We build relationships and provide solutions to hospitals, reference laboratories, research centers, veterinary testing centers, physician offices, diagnostics manufacturers, and biotech companies in more than 70 countries around the world.
Meridian’s shares are traded on the NASDAQ Global Select Market, symbol VIVO. Meridian’s website address is www.meridianbioscience.com.
Contact:
Vice President – Investor Relations
Phone: +1 513.271.3700
Email: mbi@meridianbioscience.com
Source: Meridian Bioscience Inc.