FINANCIAL CONDITION

The Company’s financial condition is sound. At March 31, 2012, current assets were $92.2 million compared to current liabilities of $16.3 million, resulting in working capital of $75.9 million and a current ratio of 5.7. Cash and short-term investments were $24.3 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.

INTERIM 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 periods of fiscal 2012 and fiscal 2011.
            Three Months Ended March 31,     Six Months Ended March 31,
2012   2011 2012   2011
Net sales $ 47,441 $ 41,059 $ 87,707 $ 78,322
Cost of goods sold 17,691 15,102 33,224 28,863
Gross profit 29,750 25,957 54,483 49,459
 
Operating expenses
Research and development 2,508 2,326 4,781 4,635
Selling and marketing 5,781 5,598 11,349 11,073
General and administrative 6,431 5,831 13,074 12,459
Plant consolidation costs 203 - 647 -
Sales and marketing leadership
reorganization costs - 1,240 - 1,240
Total operating expenses 14,923 14,995 29,851 29,407
 
Operating income 14,827 10,962 24,632 20,052
Other income (expense), net (35) 145 286 365
Income before income taxes 14,792 11,107 24,918 20,417
Income tax provision 5,166 3,847 8,714 7,132
Net earnings $ 9,626 $ 7,260 $ 16,204 $ 13,285
 
Net earnings per basic common share $ 0.23 $ 0.18 $ 0.39 $ 0.33
Basic common shares outstanding 41,080 40,686 41,071 40,647
 
Net earnings per diluted common share $ 0.23 $ 0.18 $ 0.39 $ 0.32
Diluted common shares outstanding 41,620 41,348 41,571 41,319
 

The following table sets forth the unaudited operating segment data for the interim periods in fiscal 2012 and fiscal 2011 (in thousands).
          Three Months Ended March 31,     Six Months Ended March 31,
2012   2011 2012   2011
Net sales
U.S. Diagnostics $ 28,657 $ 25,528 $ 53,857 $ 48,178
European Diagnostics 6,924 6,385 12,429 12,314
Life Science 11,860 9,146 21,421 17,830
$ 47,441 $ 41,059 $ 87,707 $ 78,322
Operating Income
U.S. Diagnostics $ 10,843 $ 9,807 $ 19,008 $ 18,381
European Diagnostics 1,376 50 2,327 803
Life Science 2,710 923 3,408 702
Eliminations (102) 182 (111) 166
$ 14,827 $ 10,962 $ 24,632 $ 20,052
 

NON-GAAP FINANCIAL MEASURES

In this press release, we have provided information on net earnings and diluted earnings per share excluding the effect of costs associated with the consolidation of our Saco, Maine operations into our Tennessee facility (2012) and the reorganizing of our Sales and Marketing Leadership (2011). We believe this information is useful to an investor in evaluating our performance because:

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