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Meridian Bioscience Reports Fourth Quarter And Full-Year 2012 Operating Results, Declares Regular Cash Dividend, And Reaffirms Fiscal 2013 Guidance

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FISCAL 2013 GUIDANCE REAFFIRMED

For the fiscal year ending September 30, 2013, management expects net sales to be in the range of $190 million to $195 million and per share diluted earnings to be between $0.86 and $0.91. The per share estimates assume an increase in average diluted shares outstanding from approximately 41.6 million at fiscal 2012 year end to 41.8 million at fiscal 2013 year end. The per share estimates include a $0.03 charge to earnings for the Medical Device Tax effective January 1, 2013 and a $0.03 charge to earnings representing the incremental cost of clinical trials for an important new illumigene ® product over and above the cost of clinical trials for past illumigene products. The sales and earnings guidance provided in this press release is from expected internal growth and does not include the impact of any additional acquisitions the Company might complete during fiscal 2013.

FINANCIAL CONDITION

The Company’s financial condition is sound. At September 30, 2012, current assets were $96.6 million compared to current liabilities of $18.5 million, resulting in working capital of $78.1 million and a current ratio of 5.2. Cash and equivalents were $31.6 million and the Company had 100% borrowing capacity under its $30.0 million commercial bank credit facility. The Company has no bank-debt obligations outstanding.

FOURTH QUARTER AND FISCAL 2012 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 interim and annual periods of fiscal 2012 and fiscal 2011.

      Three Months Ended   Twelve Months Ended
September 30, September 30,
2012   2011 2012   2011
Net sales $ 43,694 $ 41,349 $ 173,542 $ 159,723
Cost of sales 15,942 16,352 63,664 59,916
Cost of sales - Plant consolidation - 509 - 509
Gross profit 27,752 24,488 109,878 99,298
 
Operating expenses
Research and development 2,834 2,494 10,275 9,822
Selling and marketing 5,730 5,731 22,922 22,772
General and administrative 7,136 5,865 26,372 24,883
Plant consolidation costs - 548 1,013 548

Sales and marketing leadership reorganization

- - - 1,240
Total operating expenses 15,700 14,638 60,582 59,265
 
Operating income 12,052 9,850 49,296 40,033
Other income, net 89 40 420 467
Earnings before income taxes 12,141 9,890 49,716 40,500
Income tax provision 3,568 3,180 16,345 13,669
Net earnings $ 8,573 $ 6,710 $ 33,371 $ 26,831
 
Net earnings per basic common share $ 0.21 $ 0.16 $ 0.81 $ 0.66
Basic common shares outstanding 41,105 40,839 41,080 40,715
 
Net earnings per diluted common share $ 0.21 $ 0.16 $ 0.80 $ 0.65
Diluted common shares outstanding 41,629 41,384 41,608 41,358
 

The following table sets forth the unaudited operating segment data for the interim and annual periods in fiscal 2012 and fiscal 2011 (in thousands).

    Three Months Ended   Twelve Months Ended
September 30, September 30,
2012   2011 2012   2011
Net sales
U.S. Diagnostics $ 27,919 $ 25,126 $ 108,010 $ 97,133
European Diagnostics 4,674 5,261 23,000 24,187
Life Science 11,101 10,962   42,532 38,403
$ 43,694 $ 41,349   $ 173,542 $ 159,723
Operating Income
U.S. Diagnostics $ 8,857 $ 8,411 $ 38,234 $ 35,191
European Diagnostics 30 418 2,428 2,199
Life Science 2,947 1,096 8,473 2,595
Eliminations 218 (75 ) 161 48
$ 12,052 $ 9,850   $ 49,296 $ 40,033
 

COMPANY COMMENTS

John A. Kraeutler, Chief Executive Officer, said, “Revenues of $43.7 million for the fourth quarter, an increase of 6% which, despite reflecting negative currency and weaker Life Science ordering patterns, were within the expected guidance range. U. S. Diagnostics sales were up 11% in the period led by our focus products, which included the illumigene molecular system, foodborne diagnostics and our tests for H. pylori. European Diagnostics revenues were flat in local currency, but down 11% when converted to U.S. currency. Our Life Science sales grew by 1% due to cyclical purchasing weakness coming from our industrial customers.

For the full fiscal year, our global Diagnostics revenues grew by 8%, with U.S. Diagnostics increasing by 11% and European Diagnostics up by 2% on a local currency basis. In fiscal 2012, 62% of all diagnostic revenues were driven by our focus categories of C. difficile testing (+21%), foodborne disease assays (+13%), and our line of H. pylori stomach ulcer-related tests (+7%). Meridian Life Science sales increased by 11%, with the Bioline molecular reagent business improving by 15% led by the SensiFAST™ and MyTaq™ product lines and core Life Science revenue increasing by 8%.

Our ability to be financially efficient was demonstrated by gross profit improving to 63% versus 62% for fiscal 2011. Operating income increased to 28% of revenues from 25% in the prior period and after tax margins improved to 19% of revenues, an increase of 2 percentage points.

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