Meridian Bioscience Reports Fourth Quarter and Full-Year 2012 Operating Results, Declares Regular Ca

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

CINCINNATI--(BUSINESS WIRE)-- Meridian Bioscience, Inc.:

GENERAL HIGHLIGHTS


Meridian Bioscience, Inc., Cincinnati, Ohio (NAS: VIVO) today:

  • reported record fourth quarter and full-year fiscal 2012 net sales of $43.7 million and $173.5 million, respectively, increases of 6% and 9%, respectively, from the same periods of the prior fiscal year;
  • reported record fourth quarter and full-year fiscal 2012 operating income of $12.1 million and $49.3 million, respectively, increases of 22% and 23%, respectively, from the same periods of the prior fiscal year;
  • reported fourth quarter fiscal 2012 net earnings of $8.6 million, or $0.21 per diluted share, increases of 28% and 31%, respectively, compared to the fiscal 2011 fourth quarter. When compared to the fiscal 2011 fourth quarter net earnings on a non-GAAP basis, the fiscal 2012 fourth quarter net earnings and net earnings per diluted share increased 16% and 17%, respectively. This non-GAAP basis excludes the effect of costs associated with the consolidation of its Saco, Maine operations into its Tennessee facility (see non-GAAP financial measure reconciliation);
  • reported record full-year fiscal 2012 net earnings of $33.4 million, or $0.80 per diluted share, increases of 24% and 23%, respectively, compared to fiscal 2011. On a non-GAAP basis, earnings were $34.0 million, or $0.82 per diluted share, increases of 20% and 19%, respectively. In fiscal 2012, this non-GAAP basis excludes the effect of costs associated with the consolidation of its Saco, Maine operations into its Tennessee facility; whereas in fiscal 2011, it excludes costs associated with the Maine/Tennessee consolidation, as well as costs associated with reorganizing its sales and marketing leadership (see non-GAAP financial measure reconciliation);
  • declared the regular quarterly cash dividend of $0.19 per share for the fourth quarter of fiscal 2012, (indicated annual rate of $0.76 per share), the same as the regular quarterly rate of fiscal 2011;
  • announced the fiscal 2013 annual indicated cash dividend rate of $0.76 per share, the same as fiscal 2012; and
  • reaffirmed its fiscal 2013 guidance of per share diluted earnings between $0.86 and $0.91 on net sales of $190 million to $195 million.

FINANCIAL HIGHLIGHTS (UNAUDITED)
In Thousands, Except per Share Data

  
Three Months EndedTwelve Months Ended
September 30,September 30,
2012 2011 % Change2012 2011 % Change
Net Sales$43,694$41,3496%$173,542$159,7239%
Operating Income12,0529,85022%49,29640,03323%
Net Earnings8,5736,71028%33,37126,83124%
Diluted Earnings per Share$0.21$0.1631%$0.80$0.6523%

Diluted Earnings per Share excluding effect of plant consolidation costs
(2012 and 2011) sales and marketing leadership reorganization costs
(2011) (see non-GAAP financial measure reconciliation)

$0.21$0.1817%$0.82$0.6919%
 
September 30,
20122011
Cash and Equivalents$31,593$23,626
Working Capital78,12875,090
Shareholders' Equity142,748138,524
Total Assets161,381155,493
 

CASH DIVIDEND MATTERS

The Board of Directors declared the regular quarterly cash dividend of $0.19 per share for the fourth quarter ended September 30, 2012. The dividend is of record November 19, 2012 and payable November 30, 2012. The Board of Directors has approved the indicated regular quarterly cash dividend rate of $0.19 per share for fiscal 2013, an annual indicated rate of $0.76 per share, the same as the rate in fiscal 2012. 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 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 20112012 2011
Net sales$43,694$41,349$173,542$159,723
Cost of sales15,94216,35263,66459,916
Cost of sales - Plant consolidation-509-509
Gross profit27,75224,488109,87899,298
 
Operating expenses
Research and development2,8342,49410,2759,822
Selling and marketing5,7305,73122,92222,772
General and administrative7,1365,86526,37224,883
Plant consolidation costs-5481,013548

Sales and marketing leadership reorganization

---1,240
Total operating expenses15,70014,63860,58259,265
 
Operating income12,0529,85049,29640,033
Other income, net8940420467
Earnings before income taxes12,1419,89049,71640,500
Income tax provision3,5683,18016,34513,669
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 outstanding41,10540,83941,08040,715
 
Net earnings per diluted common share$0.21$0.16$0.80$0.65
Diluted common shares outstanding41,62941,38441,60841,358
 

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 20112012 2011
Net sales
U.S. Diagnostics$27,919$25,126$108,010$97,133
European Diagnostics4,6745,26123,00024,187
Life Science11,10110,962 42,53238,403
$43,694$41,349 $173,542$159,723
Operating Income
U.S. Diagnostics$8,857$8,411$38,234$35,191
European Diagnostics304182,4282,199
Life Science2,9471,0968,4732,595
Eliminations218(75)16148
$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.

Looking forward, we believe that we are well-positioned for continued organic growth and operating efficiency. Approximately 950 clinical labs are current customers using our illumigene platform, which now includes three simple molecular tests, C. difficile, for hospital associated infections, Group B strep, a serious pathogen that should be monitored during pregnancy, and our recently FDA cleared Group A strep test to diagnose strep throat disease. While the bulk of these labs are currently using one of our three available assays, more and more are adopting multiple assays. Over 100 are purchasing two assays and several all three assays. During the period, over 80 assays were placed and 50 new customers acquired. Our illumigene platform contributed $23+ million in fiscal 2012, and we foresee significant growth in fiscal 2013 based upon these three tests plus 2-3 additional illumigene tests that are expected to be marketed during the year. Our illumigeneMycoplasma pneumoniae test was submitted for FDA clearance this week, and we expect that our test for Bordetella pertussis (whooping cough) will be submitted mid-year. Our R&D pipeline is excellent and, in addition to the tests above, includes several new rapid immunoassays, as well as two new illumigene tests for common sexually transmitted diseases.

Growth in our Life Science business is expected to be led by our market expansion efforts that bring the Bioline molecular reagents to the industrial diagnostic segm

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