News Release
Meridian Bioscience Reports Second Quarter 2020 Operating Results; Raises Guidance on Strength of COVID-19 Related Products
Second Quarter Fiscal 2020 Highlights:
- Consolidated Net Revenue of
$57.3 million , up 14% year-over-year - Life Science segment responded early and swiftly to the COVID-19 pandemic contributing to a record
$22.4 million in revenues, up 33% year-over-year - Diagnostics segment delivered over
$34.9 million in revenue, the fifth consecutive quarter above$33 million and year-over-year growth for the first time in five quarters - During the quarter, the Curian® analyzer and HpSA® assay received FDA clearance, the first internally developed new product in several years and the first of several in development
Second Quarter Fiscal 2020 Results (Comparison to Second Quarter Fiscal 2019)
Consolidated revenue for the second quarter of fiscal 2020 increased 14% to
Reported operating income for the second quarter of fiscal 2020 was
Earnings per diluted share on a reported GAAP basis totaled
Raising Fiscal 2020 Guidance
Our performance fiscal year-to-date was well above our expectations. We are slightly ahead of last year’s first half revenue and already delivered Adjusted Diluted EPS at the upper end of our original guidance range for the full year. We expect this strong performance to continue, with our Life Science business more than compensating for the temporary reduction in demand for non-urgent care tests in our Diagnostics business, and are raising our guidance for the year.
Net Revenues:
- Consolidated
$230 million to$236 million - Life Science
$110 million to$114 million - Diagnostics
$120 million to$122 million
Adjusted Operating Margin: Consolidated 18% to 19%
Adjusted Earnings Per Share on a Diluted Basis:
The revenue components of this guidance assume that our Life Science business will see COVID-19 related demand for molecular reagents used in PCR tests and immunological reagents used in serology tests ranging from
This guidance reflects our current visibility into market conditions for our products and our current assumptions about the extent and duration of the impacts from this pandemic. We expect that our visibility will improve throughout the quarter as local governments around the world begin to relax shelter-in-place orders and healthcare systems return to normal operations with respect to diagnostic testing for infectious diseases and blood chemistry.
Financial Condition
At
In connection with the
Conference Call Information
To participate in the live call by telephone from the
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 | Six Months Ended | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
Net revenues | $ | 57,296 | $ | 50,248 | $ | 104,717 | $ | 101,728 | |||||||||
Cost of sales | 22,842 | 20,910 | 42,823 | 40,818 | |||||||||||||
Gross profit | 34,454 | 29,338 | 61,894 | 60,910 | |||||||||||||
Operating expenses | |||||||||||||||||
Research and development | 5,386 | 3,816 | 10,210 | 7,700 | |||||||||||||
Selling and marketing | 6,514 | 6,911 | 13,198 | 14,474 | |||||||||||||
General and administrative | 10,480 | 7,388 | 19,236 | 16,286 | |||||||||||||
Acquisition-related costs | 1,787 | 885 | 1,787 | 972 | |||||||||||||
Change in fair value of contingent | |||||||||||||||||
consideration obligation | (2,491 | ) | - | (1,304 | ) | - | |||||||||||
Restructuring costs | 252 | (100 | ) | 527 | (100 | ) | |||||||||||
Selected legal costs | 735 | 603 | 1,055 | 1,192 | |||||||||||||
Total operating expenses | 22,663 | 19,503 | 44,709 | 40,524 | |||||||||||||
Operating income | 11,791 | 9,835 | 17,185 | 20,386 | |||||||||||||
Other income (expense), net | 856 | (588 | ) | (512 | ) | (663 | ) | ||||||||||
Earnings before income taxes | 12,647 | 9,247 | 16,673 | 19,723 | |||||||||||||
Income tax provision | 3,288 | 2,153 | 4,487 | 4,523 | |||||||||||||
Net earnings | $ | 9,359 | $ | 7,094 | $ | 12,186 | $ | 15,200 | |||||||||
Net earnings per basic common share | $ | 0.22 | $ | 0.17 | $ | 0.28 | $ | 0.36 | |||
Basic common shares outstanding | 42,830 | 42,496 | 42,810 | 42,472 | |||||||
Net earnings per diluted common share | $ | 0.22 | $ | 0.17 | $ | 0.28 | $ | 0.35 | |||
Diluted common shares outstanding | 42,968 | 42,946 | 42,953 | 42,925 |
Adjusted Financial Measures | ||||||||||||
(see non-GAAP financial measure reconciliation below) | ||||||||||||
Operating income | $ | 12,074 | $ | 11,223 | $ | 19,250 | $ | 22,450 | ||||
Net earnings | 10,004 | 8,159 | 14,183 | 16,783 | ||||||||
Net earnings per diluted common share | $ | 0.23 | $ | 0.19 | $ | 0.33 | $ | 0.39 | ||||
Condensed Balance Sheet Data
2020 | 2019 | |||||
Cash and equivalents | $ | 49,550 | $ | 66,097 | ||
Working capital | 98,704 | 120,583 | ||||
Long-term debt | 48,824 | 47,946 | ||||
Shareholders’ equity | 204,533 | 181,645 | ||||
Total assets | 319,074 | 253,964 |
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).
Three Months Ended | Six Months Ended | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||
Net Revenues - By Product Platform/Type | ||||||||||||||||||
Diagnostics | ||||||||||||||||||
Molecular assays | $ | 7,238 | $ | 7,084 | $ | 14,077 | $ | 14,314 | ||||||||||
Immunoassays & blood chemistry assays | 27,704 | 26,416 | 55,656 | 55,851 | ||||||||||||||
34,942 | 33,500 | 69,733 | 70,165 | |||||||||||||||
Life Science | ||||||||||||||||||
Molecular reagents | 11,534 | 5,390 | 16,892 | 11,998 | ||||||||||||||
Immunological reagents | 10,820 | 11,358 | 18,092 | 19,565 | ||||||||||||||
Total Life Science | 22,354 | 16,748 | 34,984 | 31,563 | ||||||||||||||
Total Net Revenues | $ | 57,296 | $ | 50,248 | $ | 104,717 | $ | 101,728 | ||||||||||
Net Revenues - By Disease State/Geography | ||||||||||||||||||
Diagnostics | ||||||||||||||||||
Gastrointestinal assays | $ | 14,014 | $ | 16,177 | $ | 30,060 | $ | 34,792 | ||||||||||
Respiratory illness assays | 10,863 | 7,553 | 18,612 | 15,534 | ||||||||||||||
Blood chemistry assays | 4,329 | 4,330 | 9,479 | 8,760 | ||||||||||||||
Other | 5,736 | 5,440 | 11,582 | 11,079 | ||||||||||||||
34,942 | 33,500 | 69,733 | 70,165 | |||||||||||||||
Life Science | ||||||||||||||||||
4,612 | 5,454 | 8,627 | 9,976 | |||||||||||||||
EMEA | 9,946 | 7,852 | 14,914 | 15,213 | ||||||||||||||
ROW | 7,796 | 3,442 | 11,443 | 6,374 | ||||||||||||||
Total Life Science | 22,354 | 16,748 | 34,984 | 31,563 | ||||||||||||||
Total Net Revenues | $ | 57,296 | $ | 50,248 | $ | 104,717 | $ | 101,728 | ||||||||||
Geographic Regions EMEA = ROW = Rest of World |
||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||
OPERATING INCOME | ||||||||||||||||||
Diagnostics | $ | 3,842 | $ | 6,676 | $ | 8,250 | $ | 15,374 | ||||||||||
Life Science | 10,818 | 5,361 | 13,879 | 10,492 | ||||||||||||||
Corporate | (2,896) | (2,216) | (4,983) | (5,521) | ||||||||||||||
Eliminations | 27 | 14 | 39 | 41 | ||||||||||||||
Total Operating Income | $ | 11,791 | $ | 9,835 | $ | 17,185 | $ | 20,386 | ||||||||||
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
SECOND QUARTER AND SIX MONTH YEAR-TO-DATE
GAAP TO NON-GAAP RECONCILIATION TABLES
(In Thousands, Except per Share Data)
Three Months | Six Months | |||||||||||||||
Ended |
Ended |
|||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Operating Expenses - | ||||||||||||||||
$ | 22,663 | $ | 19,503 | $ | 44,709 | $ | 40,524 | |||||||||
Acquisition-related costs | (1,787 | ) | (885 | ) | (1,787 | ) | (972 | ) | ||||||||
Change in fair value of contingent consideration obligation |
2,491 | - | 1,304 | - | ||||||||||||
Restructuring costs | (252 | ) | 100 | (527 | ) | 100 | ||||||||||
Selected legal costs | (735 | ) | (603 | ) | (1,055 | ) | (1,192 | ) | ||||||||
Adjusted Operating Expenses | $ | 22,380 | $ | 18,115 | $ | 42,644 | $ | 38,460 | ||||||||
Operating Income - | ||||||||||||||||
$ | 11,791 | $ | 9,835 | $ | 17,185 | $ | 20,386 | |||||||||
Acquisition-related costs | 1,787 | 885 | 1,787 | 972 | ||||||||||||
Change in fair value of contingent consideration obligation |
(2,491 | ) | - | (1,304 | ) | - | ||||||||||
Restructuring costs | 252 | (100 | ) | 527 | (100 | ) | ||||||||||
Selected legal costs | 735 | 603 | 1,055 | 1,192 | ||||||||||||
Adjusted Operating Income | $ | 12,074 | $ | 11,223 | $ | 19,250 | $ | 22,450 | ||||||||
Net Earnings - | ||||||||||||||||
$ | 9,359 | $ | 7,094 | $ | 12,186 | $ | 15,200 | |||||||||
Acquisition-related costs * | 1,787 | 680 | 1,787 | 747 | ||||||||||||
Change in fair value of contingent consideration obligation * |
(1,886 | ) | - | (985 | ) | - | ||||||||||
Restructuring costs * | 190 | (78 | ) | 398 | (78 | ) | ||||||||||
Selected legal costs * | 554 | 463 | 797 | 914 | ||||||||||||
Adjusted Earnings | $ | 10,004 | $ | 8,159 | $ | 14,183 | $ | 16,783 | ||||||||
Net Earnings per Basic Common Share - | ||||||||||||||||
$ | 0.22 | $ | 0.17 | $ | 0.28 | $ | 0.36 | |||||||||
Acquisition-related costs | 0.04 | 0.02 | 0.04 | 0.02 | ||||||||||||
Change in fair value of contingent consideration obligation |
(0.04 | ) | - | (0.02 | ) | - | ||||||||||
Restructuring costs | - | - | 0.01 | - | ||||||||||||
Selected legal costs | 0.01 | 0.01 | 0.02 | 0.02 | ||||||||||||
Adjusted Basic EPS | $ | 0.23 | $ | 0.19 | ** | $ | 0.33 | $ | 0.40 | |||||||
Three Months | Six Months | ||||||||||||||||||||||||||||||||||
Ended |
Ended |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Net Earnings per Diluted Common Share - | |||||||||||||||||||||||||||||||||||
$ | 0.22 | $ | 0.17 | $ | 0.28 | $ | 0.35 | ||||||||||||||||||||||||||||
Acquisition-related costs | 0.04 | 0.02 | 0.04 | 0.02 | |||||||||||||||||||||||||||||||
Change in fair value of contingent consideration obligation |
(0.04 | ) | - | (0.02 | ) | - | |||||||||||||||||||||||||||||
Restructuring costs | - | - | 0.01 | - | |||||||||||||||||||||||||||||||
Selected legal costs | 0.01 | 0.01 | 0.02 | 0.02 | |||||||||||||||||||||||||||||||
Adjusted Diluted EPS | $ | 0.23 | $ | 0.19 | ** | $ | 0.33 | $ | 0.39 | ||||||||||||||||||||||||||
* Net of tax. | |||||||||||||||||||||||||||||||||||
** Does not sum to total due to rounding. |
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 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.