Meridian Bioscience, Inc. (NASDAQ: VIVO) today:
- reported first quarter net sales of $44.8 million, a decrease of 1% from the same period of the prior fiscal year;
- reported first quarter operating income of $11.6 million, a decrease of 11% from the same period of the prior fiscal year;
- reported first quarter net earnings of $7.4 million, or $0.18 per diluted share, decreases of 12% and 10%, respectively, compared to the fiscal 2013 first quarter;
- declared the increased regular quarterly cash dividend of $0.20 per share for the first quarter of fiscal 2014 (indicated rate of $0.80 per share) a 5% increase over the regular quarterly rate for fiscal 2013; and
- reaffirmed its fiscal 2014 guidance of per share diluted earnings between $0.98 and $1.03 on net sales of $203 million to $208 million.
|FINANCIAL HIGHLIGHTS (UNAUDITED)In Thousands, Except per Share Data|
|Three Months Ended December 31,|
|Diluted Earnings per Share||$||0.18||$||0.20||-10||%|
|Dec. 31||Dec. 31|
|Cash and Equivalents||$||43,729||$||33,149|
William J. Motto, Executive Chairman of the Board, said, “We are disappointed that a number of factors converged during the first quarter to negatively affect our operating results. We expect much of the lost revenue and profits will be made up during the current quarter and remain optimistic that fiscal 2014 will be "on plan" and consistent with our previously issued guidance. Fiscal 2014 is expected to be another year of growth driven by new products, increased placements and usage of our illumigene platform, and close attention to operating efficiency. We continue to examine acquisition opportunities as we maintain a debt-free, strong balance sheet and follow our liberal cash dividend policy.”CASH DIVIDEND MATTERS The Board of Directors declared the regular quarterly cash dividend of $0.20 per share for the first quarter ended December 31, 2013. The dividend is of record February 3, 2014 and payable February 14, 2014. This annual indicated dividend rate of $0.80 per share represents a 5% increase over the rate in fiscal 2013. 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 2014 GUIDANCE REAFFIRMED For the fiscal year ending September 30, 2014, management expects net sales to be in the range of $203 million to $208 million and per share diluted earnings to be between $0.98 and $1.03. The per share estimates assume an increase in average diluted shares outstanding from approximately 41.9 million at fiscal 2013 year end to approximately 42.3 million at fiscal 2014 year end. The sales and earnings guidance provided in this press release is from expected internal growth and does not include the impact of any acquisitions the Company might complete during fiscal 2014.
FINANCIAL CONDITIONThe Company’s financial condition is sound. At December 31, 2013, current assets were $111.2 million compared to current liabilities of $17.5 million, resulting in working capital of $93.7 million and a current ratio of 6.4. Cash and equivalents were $43.7 million and the Company had 100% borrowing capacity under its $30.0 million commercial bank credit facility. The Company has no bank-debt obligations outstanding. FIRST QUARTER UNAUDITED OPERATING RESULTS(In Thousands, Except per Share Data) The following table sets forth the unaudited comparative results of Meridian on a U.S. GAAP basis for the first quarters of fiscal 2014 and fiscal 2013.
|Three Months EndedDecember 31,|
|Cost of sales||16,787||16,555|
|Research and development||2,853||2,517|
|Selling and marketing||5,978||5,693|
|General and administrative||7,550||7,495|
|Total operating expenses||16,381||15,705|
|Other income (expense), net||(216||)||135|
|Earnings before income taxes||11,410||13,226|
|Income tax provision||3,984||4,752|
|Net earnings per basic common share||$||0.18||$||0.21|
|Basic common shares outstanding||41,408||41,148|
|Net earnings per diluted common share||$||0.18||$||0.20|
|Diluted common shares outstanding||42,099||41,752|
|Three Months EndedDecember 31,|
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, and its ability to effectively sell such products. 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. Meridian relies on proprietary, patented and licensed technologies, and 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 United States Food and Drug Administration, can result in unanticipated expenses and delays and interruptions to the sale of new and existing products. The international scope of Meridian’s operations, including changes in the relative strength or weakness of the U.S. dollar and general economic conditions in foreign countries, can impact results and make them difficult to predict. One of Meridian's 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 will be successfully integrated into Meridian's operations. There may be risks that acquisitions may disrupt operations and may pose potential difficulties in employee retention and there may be additional risks with respect to Meridian’s ability to recognize the benefits of acquisitions, including potential synergies and cost savings or the failure of acquisitions to achieve their plans and objectives. The Company cannot predict the possible impact of recently-enacted United States healthcare legislation and any 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 develops, 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, diagnostics manufacturers and biotech companies in more than 60 countries around the world. The Company’s shares are traded on the NASDAQ Global Select Market, symbol VIVO. Meridian's website address is www.meridianbioscience.com.