Meridian Bioscience Reports Record Operating Results, Declares Regular Cash Dividend, and Reaffirms Higher Fiscal 2005 Guidance.CINCINNATI -- Meridian Meridian (mərĭd`ēən), city (1990 pop. 41,036), seat of Lauderdale co., E Miss., near the Ala. line; settled 1831, inc. 1860. Bioscience bioscience /bio·sci·ence/ (-si´ens) the study of biology wherein all the applicable sciences (physics, chemistry, etc.) are applied. bi·o·sci·ence n. See life science. , Inc., Cincinnati, Ohio “Cincinnati” redirects here. For other uses, see Cincinnati (disambiguation). Cincinnati is a city in the U.S. state of Ohio and the county seat of Hamilton County. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :VIVO (Video In Video Out) Refers to a display adapter with analog video capture and analog video out (NTSC out) capabilities. See display adapter. ) today: --reported record third quarter sales of $25,421,000, a 39% increase over the same period of the prior fiscal year and an all-time record for any quarter in the Company's history; --reported record third quarter operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $5,708,000, an increase of 70% over the same period of the prior fiscal year and an all-time record for any quarter in the Company's history; --reported record third quarter diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.22, a 57% increase over the same period of the prior fiscal year based on 16,201,000 average diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. shares outstanding compared to 15,260,000 for the same period of fiscal 2004; --declared the regular quarterly cash dividend of $0.12 per share, 20% higher than the regular quarterly rate of fiscal 2004; and --reaffirmed its recently increased guidance of net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight between $89 million and $92 million and per share diluted earnings between $0.73 and $0.76 for the fiscal year ending September 30, 2005.
FINANCIAL HIGHLIGHTS
In Thousands, Except per Share Data
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Three Months Ended June 30
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2005 2004 Change
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Net Sales $25,421 $18,256 39%
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Operating Income 5,708 3,366 70%
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Net Earnings 3,498 2,157 62%
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Earnings per Share (diluted) $0.22 $0.14 57%
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Cash $4,028 $2,056 $1,972
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Working Capital 18,477 16,640 1,837
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Long-term Debt Obligations 5,386 16,495 (11,109)
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Shareholders' Equity 48,965 30,736 18,229
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Total Assets $80,666 $65,849 $14,817
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THIRD QUARTER RESULTS Net sales for the third fiscal quarter ended June 30, 2005, were $25,421,000 as compared to $18,256,000 for the same period of the prior fiscal year, an increase of 39%. Net earnings for the third quarter of fiscal 2005 were $3,498,000, or $0.22 per diluted share, up 62% and 57%, respectively, over the third quarter of fiscal 2004. Diluted common shares outstanding for the third quarter of fiscal 2005 and 2004 were 16,201,000 and 15,260,000 respectively, an increase of 6% due primarily to the conversion of 7% convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. to common stock. YEAR-TO-DATE Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. RESULTS Net sales for the nine months ended June 30, 2005, were $67,949,000 as compared to $57,362,000 for the same period of the prior fiscal year, an increase of 18%. Net earnings for the nine months ended June 30, 2005, were $8,804,000, or $0.55 per diluted share, up 41% and 34%, respectively, over the same period of prior fiscal year 2004. Diluted common shares outstanding for the first nine months of fiscal 2005 and 2004 were 15,928,000 and 15,236,000 respectively, an increase of 5%. CASH DIVIDEND MATTERS The Board of Directors declared the regular quarterly cash dividend of $0.12 per share for the third quarter ended June 30, 2005. The record date is August 4, 2005 and the dividend is payable August 8, 2005. The annual indicated cash dividend rate for fiscal 2005 is $0.48 per share, an increase of 20% over the fiscal 2004 rate of $0.40 per share. Meridian has increased its regular cash dividend rate thirteen times since it established a regular dividend fourteen years ago. Guided by the Company's policy of setting a payout ratio Payout Ratio The percentage of earnings paid out in dividends. It is calculated by dividing dividends per share by earnings per share. Notes: The payout ratio indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend. 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. RECENT FISCAL 2005 INCREASED GUIDANCE REAFFIRMED On July 11, 2005, Meridian announced that it increased its previous guidance for fiscal 2005 earnings from a range of $0.66 to $0.70 per diluted share to a new range of $0.73 to $0.76 per diluted share. The per share estimates assume an increase in average shares outstanding from approximately 15.3 million at fiscal 2004 year end to 16.1 million at fiscal 2005 year end. Net sales guidance for fiscal 2005 was increased from $84 to $88 million to a new range of $89 million to $92 million. This new guidance included a modest accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the from O.E.M. Concepts, acquired in the second quarter of fiscal 2005. FINANCIAL CONDITION The Company's financial condition is sound. At June 30, 2005, current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. were $40,252,000 compared to current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. of $21,775,000 thereby producing working capital of $18,477,000 and a current ratio of 1.85. Cash on hand was $4,028,000 and the Company had an unused borrowing capacity of $18,233,000 under its commercial bank credit facility. Long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. obligations were $5,386,000 compared to shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $48,965,000. Subordinated convertible debt of $4,935,000 with a maturity date of September 1, 2013 represented 92% of the total long-term debt obligations outstanding.
UNAUDITED OPERATING RESULTS
In Thousands, Except per Share Data
-----------------------------------
The following table sets forth the unaudited comparative operating
results of Meridian Bioscience for the interim periods of fiscal 2005
and fiscal 2004.
Three Months Ended Nine Months Ended
June 30, June 30,
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2005 2004 2005 2004
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Net sales $25,421 $18,256 $67,949 $57,362
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Cost of goods sold 9,735 7,355 27,673 24,311
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Gross profit 15,686 10,901 40,276 33,051
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Operating expenses
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Research and development 1,190 1,050 2,884 3,217
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Sales and marketing 3,647 3,077 11,019 9,389
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General and administrative 5,141 3,408 12,000 9,950
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Total operating expenses 9,978 7,535 25,903 22,556
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Operating income 5,708 3,366 14,373 10,495
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Other income (expense), net (193) (399) (545) (1,172)
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Income before income taxes 5,515 2,967 13,828 9,323
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Income tax provision 2,017 810 5,024 3,082
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Net earnings 3,498 2,157 8,804 6,241
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Net earnings per basic common share $0.22 $0.14 $0.57 $0.42
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Basic common shares outstanding 15,768 14,899 15,478 14,846
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Net earnings per diluted common
share $0.22 $0.14 $0.55 $0.41
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Diluted common shares outstanding 16,201 15,260 15,928 15,236
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SEGMENT DATA
In Thousands
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The following table sets forth the unaudited operating segment data
for the interim periods in fiscal 2005 and fiscal 2004.
Three Months Ended Nine Months Ended
June 30, June 30,
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2005 2004 2005 2004
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Net sales (third-party)
U.S. Diagnostics $13,646 $10,470 $40,035 $35,402
European Diagnostics 4,880 4,086 13,805 11,619
Life Science 6,895 3,700 14,109 10,341
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$25,421 $18,256 $67,949 $57,362
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Operating Income
U.S. Diagnostics $3,296 $1,784 $9,949 $7,582
European Diagnostics 835 828 1,985 1,557
Life Science 1,744 751 2,548 1,407
Eliminations (167) 3 (109) (51)
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$5,708 $3,366 $14,373 $10,495
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COMPANY COMMENTS John A. Kraeutler, President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , commented, "Double-digit revenue increases from each of our business units, plus strong operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. , produced record earnings and increases in margin and other key operating ratios Operating Ratio A ratio that shows the efficiency of management by comparing operating expense to net sales: . Our diagnostic business continues to gain market share as a result of focused sales effort and new product introductions, such as ImmunoCard(R) Toxins A&B, our newest rapid test for C.difficile. Our Life Science business continues to expand its capabilities, including contract services. We anticipate continued growth and operating strength in all of our businesses." William J. Motto, Chairman and Chief Executive Officer, said, "Our third quarter operating results set all time records for sales and profitability. All of our business units met or exceeded their budgets for the quarter. When this happens the true earning power Earning power Earnings before interest and taxes (EBIT) divided by total assets. earning power 1. The earnings that an asset could produce under optimal conditions. For example, AT&T may currently be earning $2. of the organization becomes evident - as shown by gross profit and operating income margins of 62% and 22%, respectively. Our cash flow continues to be very strong and we further strengthened our balance sheet with the conversion and retirement of the 7% convertible subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before in July--over a year before their maturity. We have effectively de-levered our capital structure which is now quite conservative with 90% equity and 10% long-term debt obligations. Our most recent acquisition, O.E.M. Concepts is working out well. We continue to look for additional product lines and businesses that fit our growth strategy. We received recognition during the third quarter including being added to Mergent's Dividend Achievers Index and the Russell 2000, as well as FORTUNE Small Business' list of "100 fastest growing small companies in America" and Business Week's list of one of "The 100 Best Small Companies." Looking forward, we expect a strong fourth quarter and a record fiscal year. Our recently increased fiscal 2005 guidance projects net sales of $89 to $92 million and per share diluted earnings of $0.73 to $0.76 is solid. As is customary, we will provide our initial guidance for fiscal 2006 by mid-August. Our long-range commitment remains unchanged, to build shareholder value through higher sales and earnings, increasing cash dividends, and a higher stock price. I look forward to reporting our fourth quarter and fiscal 2005 results to you." FORWARD LOOKING STATEMENTS The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. from civil litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. for forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. accompanied by meaningful cautionary statements. Except for historical information, this report contains forward-looking statements which may be identified by words such as "estimates", "anticipates", "projects", "plans", "seeks", "may", "will", "expects", "intends", "believes", "should" and similar expressions or the negative versions thereof and which also may be identified by their context. Such statements are based upon current expectations of the Company and speak only as of the date made. The Company assumes no obligation to publicly update any forward-looking statements. These statements are subject to various risks, uncertainties and other factors that could cause actual results to differ, including, without limitation, the following: 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. 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. Ongoing consolidations of reference laboratories and formation of multi-hospital alliances may cause adverse changes to pricing and distribution. Costs and difficulties in complying with laws and regulations administered by the United States Food and Drug Administration United States Food and Drug Administration (FDA), n.pr a unit of the Public Health Service created to protect the health of the nation against impure and unsafe foods, drugs, and cosmetics. can result in unanticipated expenses and delays and interruptions to the sale of new and existing products. Changes in the relative strength or weakness of the U.S. dollar can change expected results. One of Meridian's main growth strategies is the acquisition of companies and product lines. There can be no assurance that additional acquisitions will be consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. or that, if consummated, will be successful and the acquired businesses successfully integrated into Meridian's operations. Meridian is a fully integrated life science company that 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 provide accuracy, simplicity and speed in the early diagnosis and treatment of common medical conditions See carpal tunnel syndrome, computer vision syndrome, dry eyes and deep vein thrombosis. , such as gastrointestinal gastrointestinal /gas·tro·in·tes·ti·nal/ (-in-tes´ti-n'l) pertaining to or communicating with the stomach and intestine. gas·tro·in·tes·ti·nal adj. Abbr. , viral Meaning "related or caused by a virus," with regard to computers and information technology, the term refers less to a computer virus than it does to information that spreads quickly via the Internet. See viral marketing and viral video. , and respiratory infections Noun 1. respiratory infection - any infection of the respiratory tract respiratory tract infection infection - the pathological state resulting from the invasion of the body by pathogenic microorganisms . Meridian 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 Noun 1. upper respiratory infection - infection of the upper respiratory tract respiratory infection, respiratory tract infection - any infection of the respiratory tract , serology Serology The division of biological science concerned with antigen-antibody reactions in serum. It properly encompasses any of these reactions, but is often used in a limited sense to denote laboratory diagnostic tests, especially for syphilis. , parasitology Parasitology The scientific study of parasites and of parasitism. Parasitism is a subdivision of symbiosis and is defined as an intimate association between an organism (parasite) and another, larger species of organism (host) upon which the parasite is and fungal fungal /fun·gal/ (fun´g'l) fungous; pertaining to fungi. fun·gal or fun·gous adj. 1. Of, relating to, resembling, or characteristic of a fungus. 2. disease diagnosis. In addition, Meridian is a supplier of rare reagents and specialty biologicals Biologicals Biological products used to induce immunity to various infectious diseases or noxious substances of biological origin. The term is usually limited to immune serums, antitoxins, vaccines, and toxoids that have the effect of providing protective along with proteins and other biologicals used by biopharmaceutical companies engaged in research for new drugs and vaccines. The Company markets its products to hospitals, reference laboratories, research centers, veterinary testing centers, physician offices and diagnostics manufacturers in more than 60 countries around the world. The Company's shares are traded through Nasdaq's National Market, symbol VIVO. Meridian's website address is www.meridianbioscience.com. |
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