Meridian Bioscience Reports Record Sales and Record First Quarter Operating Income, Declares First Quarter Higher Regular Cash Dividend, and Reaffirms Fiscal 2004 Guidance
CINCINNATI--(BUSINESS WIRE)--Jan. 22, 2004--Meridian Bioscience, Inc., (Nasdaq:VIVO) today:
- reported record quarterly net sales of $18,166,000, a 13% increase over the same period of the prior fiscal year and an all time record for any quarter in the Company's history;
- reported diluted net earnings of $1,795,000 or $0.12 per diluted share, a 26% increase over the same period of the prior fiscal year;
- reported record first quarter operating income of $3,148,000;
- declared a regular quarterly cash dividend of $0.10 per share, $0.01 per share higher (11%) than the regular quarterly rate of fiscal 2003; and
- reaffirmed its earlier guidance of net sales between $71 million and $75 million and per share diluted earnings between $0.47 and $0.53 for the fiscal year ending September 30, 2004.
FINANCIAL HIGHLIGHTS In Thousands, Except per Share Data ---------------------------------------------------------------------- Three Months Ended December 31 2003 2002 % Change ----- ----- --------- Net Sales $18,166 $16,103 +13 Operating Income 3,148 2,762 +14 Net Earnings 1,795 1,424 +26 Earnings per Share (diluted) $ 0.12 $ 0.10 +20 Cash and Equivalents $ 3,714 $ 4,146 Working Capital 18,710 16,289 Long-term Obligations 20,879 23,612 Shareholders' Equity 29,018 24,986 Total Assets 66,931 63,425
FIRST QUARTER OPERATING RESULTS
Net sales for the first quarter ended December 31, 2003, were $18,166,000 as compared to $16,103,000 for the same period of the prior fiscal year, an increase of 13%. Net earnings for the first quarter of fiscal 2004 were $1,795,000 or $0.12 per diluted share, up 26% and 20%, respectively, over the first quarter of fiscal 2003. Diluted common shares outstanding for the first quarter of fiscal 2004 and 2003 were 15,170,000 and 14,774,000, respectively.
CASH DIVIDEND MATTERS
The Board of Directors declared the regular quarterly cash dividend of $0.10 per share for the first quarter ended December 31, 2003. The dividend is of record February 2, 2004 and payable February 9, 2004. The annual indicated cash dividend rate for fiscal 2003 is $0.40 per share, an increase of 11% over the $0.36 per share rate for fiscal 2003.
Meridian Bioscience has increased its regular dividend rate eleven times since establishing a regular dividend policy thirteen years ago. During November 2002, the Board of Directors adopted a new dividend policy calling for an increased payout ratio of net earnings. The fiscal 2004 indicated dividend payout ratios reflect the Company's policy of paying out between 75% and 85% of each fiscal year's expected net earnings. Consideration will also be given by the Board to special year-end cash or stock dividends. The 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 2004 GUIDANCE REAFFIRMED
Management expects net sales to be in the range of $71 to $75 million and per share diluted earnings to be between $0.47 and $0.53 for the fiscal year ending September 30, 2004. The per share estimates assume an increase in average shares outstanding from approximately 15.0 million at fiscal 2003 year end to 15.3 million at fiscal 2004 year end. The sales and earnings guidance provided in this press release does not include the impact of any acquisitions the Company might complete during fiscal 2004.
The Company's financial condition is sound. At December 31, 2003, current assets were $33,690,000 compared to current liabilities of $14,980,000 thereby producing working capital of $18,710,000 and a current ratio of 2.25. Cash and equivalents were $3,714,000 and the Company had a borrowing capacity of $20,000,000 under its commercial bank credit facility. Long-term debt obligations were $20,879,000 compared to shareholders' equity of $29,018,000. Subordinated convertible debt of $20 million represented 96% of the total long-term debt obligations outstanding.
UNAUDITED OPERATING RESULTS 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 2004 and fiscal 2003 (in thousands, except per share data). Three Months Ended December 31 2003 2002 -------- -------- Net sales $18,166 $16,103 Cost of goods sold 8,049 6,941 -------- -------- Gross profit 10,117 9,162 -------- -------- Operating expenses - Research and development 972 911 Selling and marketing 3,044 2,785 General and administrative 2,953 2,704 -------- -------- Total operating expenses 6,969 6,400 -------- -------- Operating income 3,148 2,762 Other income (expense) (324) (397) -------- -------- Earnings before income taxes 2,824 2,365 Income tax provision 1,029 941 -------- -------- Net earnings $1,795 $1,424 ======== ======== Net earnings per basic common share $0.12 $0.10 Weighted average basic common shares outstanding 14,744 14,635 Net earnings per diluted share $0.12 $0.10 Weighted average diluted common shares outstanding 15,170 14,774
John A. Kraeutler, President and Chief Operating Officer, commented, "I am pleased with the 13% revenue increase we reported for the first fiscal quarter of 2004. Our core diagnostics business was especially strong as we maximized the opportunities arising from an early and widespread flu season. We continue to focus on diagnostic product revenue growth, new product development and prudent spending and investments in the business. As the year progresses, our core business will be strengthened by the launch of exciting new products that will enable the rapid detection of stomach ulcers and antibiotic associated colitis. In addition, key biopharmaceutical projects from our expanding Life Science business are expected to be strong contributors to our growth."
William J. Motto, Chairman and Chief Executive Officer, stated, "Fiscal 2004 is off to a strong start and we feel very comfortable with per share earnings guidance provided. Our offer to exchange outstanding 7% convertible debentures for new 5% convertible debentures is underway and will expire at midnight EST on Wednesday, January 28, 2004. This action combined with our upcoming $4 million redemption of outstanding debentures at par value is the first step in our plans to retire the 7% convertible debentures due September 2006. The result will be lower interest expense, reduced share dilution, and favorable lower cost long-term subordinated debt financing. Our capital structure is sound, well established and includes an additional $20 million commercial bank credit facility available to fund growth opportunities including acquisitions. We have always placed a high value on maintaining a sound capital structure and will continue to do so. At the same time, our cash flow from operations allows a targeted dividend payout ratio of between 75% and 85%. We have increased our cash dividend rate eleven times during the past thirteen years. As we look forward, should the price of our common stock continue to advance, consideration will be given to a stock split to enhance the trading market for our shares."
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", "expects", "intends", "believes", "should" and similar expressions or the negative versions thereof and which also may be identified by their context. Such statements 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, 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.
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 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 and specialty biologicals along with proteins and other biologicals used by biopharmaceutical companies engaged in research for new drugs and vaccines. The Company markets its products to hospitals, reference laboratories, research centers, veterinary testing centers, physician offices and diagnostics manufacturers 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 www.meridianbioscience.com.
CONTACT: Meridian Bioscience, Inc.
John A. Kraeutler, 513-271-3700
SOURCE: Meridian Bioscience, Inc.