Meridian Bioscience Inc. posted first-quarter sales of $42.5 million for the three months ended Dec. 31, 2009, up 23.8 percent compared with $34.3 million during the same period in fiscal 2009. Net earnings rose 10.5 percent to $8.9 million, compared with $8.1 million during Q1 2009:
Press Release
CINCINNATI–(BUSINESS WIRE)–Meridian Bioscience, Inc. (NASDAQ: VIVO):
GENERAL HIGHLIGHTS
Meridian Bioscience, Inc., Cincinnati, Ohio (NASDAQ: VIVO) today:
-
reported record first quarter net sales of $42.5 million, an increase
of 24%, over the same period of the prior fiscal year; -
reported record first quarter operating income of $13.8 million, an
increase of 13%, over the same period of the prior fiscal year; -
reported record first quarter earnings and diluted earnings per share
of $8.9 million and $0.22, both increases of 10% over the same period
of the prior fiscal year; -
declared the regular quarterly cash dividend of $0.19 per share for
the first quarter of fiscal 2010, (indicated annual rate of $0.76 per
share), 12% higher than the regular quarterly rate of fiscal 2009; and -
reaffirmed its fiscal 2010 guidance of per share diluted earnings
between $0.90 and $0.95 on net sales of $160 million to $165 million.
FINANCIAL HIGHLIGHTS (UNAUDITED)
In
Thousands, Except per Share Data
|
Three Months Ended December 31, | |||||||||||||
2009 |
2008 |
% Change |
||||||||||||
Net Sales | $ |
42,457 |
$ |
34,293 |
24 |
% |
||||||||
Operating Income | 13,756 | 12,158 | 13 | % | ||||||||||
Net Earnings | 8,921 | 8,076 | 10 | % | ||||||||||
Diluted Earnings per Share | $ | 0.22 | $ | 0.20 | 10 | % | ||||||||
Dec. 31 | Dec. 31 | |||||||||||||
2009 |
2008 |
|||||||||||||
Cash and Short-Term Investments |
$ |
66,730 |
$ |
49,761 | ||||||||||
Working Capital | 102,688 | 86,914 | ||||||||||||
Shareholders’ Equity | 140,426 | 131,427 | ||||||||||||
Total Assets |
154,723 |
146,125 |
||||||||||||
FIRST QUARTER OPERATING RESULTS
Net sales for the first quarter of fiscal 2010 were $42,457,000 as
compared to $34,293,000 for the same period of the prior fiscal year, an
increase of 24%. Net earnings for the first quarter of fiscal 2010 were
$8,921,000 or $0.22 per diluted share, both increases of 10% over the
first quarter of fiscal 2009. Diluted common shares outstanding for
fiscal 2010 and 2009 were 41,185,000 and 41,125,000, respectively.
CASH DIVIDEND MATTERS
The Board of Directors declared the regular quarterly cash dividend of
$0.19 per share for the quarter ended December 31, 2009. The dividend is
of record February 1, 2010 and payable February 11, 2010. This annual
indicated dividend rate of $0.76 per share represents a 12% increase
over the fiscal 2009 rate of $0.68 per share. Meridian has now increased
its regular cash dividend rate nineteen times since it established a
regular dividend in 1991. 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 2010 GUIDANCE REAFFIRMED
For the fiscal year ending September 30, 2010, management expects net
sales to be in the range of $160 million to $165 million and per share
diluted earnings to be between $0.90 and $0.95. The sales and earnings
guidance provided in this press release does not include the impact of
any acquisitions the Company might complete during fiscal 2010.
FINANCIAL CONDITION
The Company’s financial condition is sound. At December 31, 2009,
current assets were $116.2 million compared to current liabilities of
$13.5 million, thereby producing working capital of $102.7 and a current
ratio of 8.6. Cash and short-term investments were $66.7 million and the
Company had 100% borrowing capacity under its $30,000,000 commercial
bank credit facility. The Company has no bank-debt obligations
outstanding.
FIRST QUARTER 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 first quarters of fiscal 2010 and
fiscal 2009.
Three Months Ended December 31, | |||||||||
2009 | 2008 | ||||||||
Net Sales | $ | 42,457 | $ | 34,293 | |||||
Cost of goods sold |
16,972 | 10,949 | |||||||
Gross profit | 25,485 | 23,344 | |||||||
Operating expenses | |||||||||
Research and development |
2,078 | 2,064 | |||||||
Sales and marketing | 4,887 | 4,967 | |||||||
General and administrative | 4,764 | 4,155 | |||||||
Total operating expenses | 11,729 | 11,186 | |||||||
Operating income | 13,756 | 12,158 | |||||||
Other income (expense), net |
(87) |
114 | |||||||
Income before income taxes |
13,669 | 12,272 | |||||||
Income tax provision | 4,748 | 4,196 | |||||||
Net earnings | $ | 8,921 | $ | 8,076 | |||||
Net earnings per basic common share | $ |
0.22 |
$ | 0.20 | |||||
Basic common shares outstanding | 40,496 | 40,318 | |||||||
Net earnings per diluted common share | $ |
0.22 |
$ | 0.20 | |||||
Diluted common shares outstanding | 41,185 | 41,125 | |||||||
The following table sets forth the unaudited operating segment data for
the interim periods in fiscal 2010 and fiscal 2009 (in thousands).
Three Months Ended December 31, | |||||||||||
2009 | 2008 | ||||||||||
Net sales | |||||||||||
U.S. Diagnostics | $ | 30,704 | $ | 23,485 | |||||||
European Diagnostics | 6,294 | 5,671 | |||||||||
Life Science |
5,459 | 5,137 | |||||||||
$ |
42,457 |
$ | 34,293 | ||||||||
Operating Income | |||||||||||
U.S. Diagnostics |
$ |
12,130 | $ | 10,387 | |||||||
European Diagnostics | 970 | 850 | |||||||||
Life Science | 904 | 847 | |||||||||
Eliminations | (248) | 74 | |||||||||
$ | 13,756 | $ | 12,158 | ||||||||
COMPANY COMMENTS
John A. Kraeutler, Chief Executive Officer, said, “Revenue growth for
the first quarter of 2010 was up due to strength in the U.S. Diagnostics
business, with the greatest contribution coming from the sale of
respiratory tests, especially influenza, along with continued growth in
the foodborne category. C. difficile sales were weaker due
to increased competition from new immunoassays as well as emerging
molecular methods, plus distributor buying patterns. We are expecting
flat sales in this product line until the launch of our new illumigene™
molecular-based technology platform later this fiscal year. In addition,
Meridian Life Science began the year with increased organic growth and
this business unit is expecting a strong sales year. Meridian Bioscience
Europe, which recently launched two new products into the Italian
market, reported increased sales due primarily to positive currency
effects. Currency adjusted sales for MBE were flat versus last year
despite a strong start in October and November.
Overall, gross profit margin for the quarter of 60% was lower than plan
due to the H1N1 pandemic driving a higher sales volume of lower margin,
OEM influenza and RSV tests. Offsetting the downward pull on margins
were our TRU Flu® and TRU RSV® tests which
comprised more than 40% of unit sales in this category. Operating income
margin exceeded 32% as we continued to control spending and focus on
efficiency.
Notably, this month we began our formal clinical trials for our illumigene
C. difficile product, our first DNA amplification test
utilizing the loop amplification (LAMP) technology licensed from Eiken
Chemical Co. of Japan. These trials are expected to last approximately 8
weeks and we plan to submit our 510k for FDA marketing clearance in
April of this year. We are encouraged by our preliminary trials of illumigene
as well as the response from our key customer previews. We are
continuing to invest in this development program and anticipate
launching additional illumigene tests in the future.
Barring any unforeseen delays, we are now targeting revenue
contributions from the illumigene C. difficile
product during the second half of fiscal 2010.
The outlook for fiscal 2010 is bright. Our Diagnostics business units
continue to add market share and improved profitability in respiratory
testing. The growth of foodborne testing continues at double-digit rates
and our managed care programs are generating strong H. pylori
demand. New products, new technologies and potential acquisitions are
likely to drive further growth this year. The resources that we have
applied to our Life Science business are producing growth along with
enhanced profitability. Our commitment to international growth is being
realized, especially through our new distribution partners.”
William J. Motto, Executive Chairman of the Board, said, “Fiscal 2010
started strong primarily due to increased demand for upper respiratory
tests, improved operating results at our Life Science unit, and
continued growth in foodborne tests. We are maintaining our previously
issued fiscal 2010 guidance of net sales in the $160 million to $165
million range and per share diluted earnings between $0.90 and $0.95.
Our cash dividend declared for the first quarter reflects the increased
indicated annual rate of $0.76 per share, up 12% from the prior fiscal
year.
We look forward to the commercial introduction of our illumigene
molecular-based platform later this fiscal year, as well as other new
product introductions and continued efficiency improvements. Our
financial condition is sound and our cash flow strong. As always, we
continue to investigate potential external growth opportunities through
acquisitions and alliances.”
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. 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.
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 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 also
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. The Company cannot predict the
possible effects of potential healthcare reform in the United States and
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 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,
veterinary testing centers, physician offices, diagnostics manufacturers
and biotech companies in more than 60 countries around the world. The
Company’s shares are traded through NASDAQ’s Global Select Market,
symbol VIVO. Meridian’s website address is www.meridianbioscience.com.