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Meridian Bioscience, Inc. (NASDAQ: VIVO) today announced weaker than expected preliminary operating results for the first quarter ended December 31, 2013.
Fiscal 2014 First Quarter Preliminary Outlook
Due to factors including reduced hospital admissions and declining
C. difficile incidence rates in hospitals putting further pressure on an already competitive market, Life Science shipments delayed into the second quarter of fiscal 2014, the timing of the start of the influenza season and related revenue impact, and food test ordering patterns, first quarter net sales are expected to be approximately $44.8 million, or down 1% compared with fiscal 2013 first quarter net sales of $45.4 million. Based on these net sales, diluted earnings per share are expected to be between $.17 and $.18. This compares to diluted earnings per share of $.20 for the first quarter of fiscal 2013. Meridian does not provide sales and earnings guidance on a quarterly basis. However, analyst estimates for net sales range from $48 million to $49.5 million (consensus median estimate of $49 million) and diluted earnings per share estimates range from $.21 to $.25 (consensus median estimate of $.22).
Fiscal 2014 Guidance
Based on second quarter to-date diagnostics order volume and sales, as well as expected higher than initially planned revenues from influenza, and Life Science shipments to-date (timing items that negatively affected the first quarter), management expects the second quarter ending March 31, 2014, sales and earnings will be above the Company's previous internal expectations. Based on this information, management is reaffirming its initial guidance of net sales of $203 million to $208 million and diluted earnings per share of $0.98 to $1.03.
Below is a brief commentary on fiscal 2014 first quarter revenues by Meridian’s reportable segments, Diagnostics and Life Science.
Diagnostics:Diagnostics revenues of $34.8 million decreased 2% from the first quarter of fiscal 2013. Ordering patterns, timing of the flu season, and trends in hospital admissions and lower
C. difficile incidence rates in North America drove the bulk of the decline.
illumigene molecular revenues increased 15% driven by
illumigene Group B strep and
illumigene Group A strep. Immunoassay revenues declined 7%, driven by flat foodborne sales (ordering patterns) and a 35% decline in respiratory sales in North America (early start to flu season in fiscal 2013 vs. fiscal 2014).
Life Science:Life Science revenues increased 3% to $10 million, with our Bioline molecular component increasing 16% and our immunoassay component business declining 7% due to customers delaying shipments to the second quarter.
John A. Kraeutler, Chief Executive Officer, stated, “Clearly we are disappointed with the results of the first quarter. While additional spending for the Medical Device Tax and equity incentives contributed to earnings being off the prior year, revenue shortfalls in the
C. difficile, foodborne, and influenza/respiratory testing categories, along with core Life Science, were the basis for the miss. While we believe a significant portion of the shortfall is a shift in revenues from the first quarter to the second quarter (over $2.5 million), in our Diagnostics unit we are placing greater emphasis on tests for infectious disease in ambulatory patients; primarily
illumigene Group B and Group A strep, along with tests for influenza and other respiratory diseases. We also believe that
illumigene Pertussis, an aid in diagnosing whooping cough, will provide meaningful revenues once FDA clearance is received. Our Life Science unit is expected to perform very well in the second quarter and perform at expectations throughout the remainder of the year.”
FORWARD LOOKING STATEMENTS