Meridian Bioscience Reports Record Sales, Higher Per Share Earnings, Declares Regular Cash Dividend, and Increases Fiscal 2004 Guidance.Business Editors/Health/Medical Writers BIOWIRE2K CINCINNATI--(BUSINESS WIRE)--April 22, 2004 Meridian Meridian (mərĭd`ēən), city (1990 pop. 41,036), seat of Lauderdale co., E Miss., near the Ala. line; settled 1831, inc. 1860. Bioscience, 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: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 all-time record quarterly sales of $20,940,000, a 24% increase over the same period of the prior fiscal year and all-time record for any quarter in the Company's history; -- reported all-time record 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 $3,981,000, an increase of 5% over the same period of the prior fiscal year and an all-time record for any quarter in the Company's history; -- reported 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 $0.15, a 15% increase over the same period of the prior fiscal year; -- declared a regular quarterly cash dividend of $0.10 per share, $0.01 per share higher (11%) than the regular quarterly rate of fiscal 2003; and -- increased its earlier 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 $71 million and $75 million and per share 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. earnings between $0.47 and $0.53 to net sales between $73 million and $77 million and per share diluted earnings between $0.50 and $0.55 for the fiscal year ending September 30, 2004.
FINANCIAL HIGHLIGHTS
In Thousands, Except per Share Data
Three Months Ended March 31
2004 2003 % Change
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Net Sales $20,940 $16,913 24%
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Operating Income 3,981 3,784 5%
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Net Earnings 2,289 1,923 19%
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Earnings per Share (diluted) $0.15 $0.13 15%
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Cash $1,566 $3,320
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Working Capital 16,040 16,620
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Long-term Debt Obligations 16,624 22,715
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Shareholders' Equity 30,038 25,804
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Total Assets 66,256 64,307
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SECOND QUARTER RESULTS Net sales for the second fiscal quarter ended March 31, 2004, were $20,940,000 as compared to $16,913,000 for the same period of the prior fiscal year, an increase of 24%. Net earnings for the second quarter of fiscal 2004 were $2,289,000, or $0.15 per diluted share, up 19% and 15%, respectively, over the second quarter of fiscal 2003. Diluted common shares outstanding for the second quarter of fiscal 2004 and 2003 were 15,284,000 and 14,876,000 respectively. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the quarter and the six months to date reflect increased research and development activities, higher sales commissions related to the higher sales levels, the negative effects of currency translation, and the lack of favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. reserve adjustments that occurred in the second quarter of fiscal 2003. Beginning in fiscal 2004, all amortization expense is classified in general and administrative expenses. During the quarter the Company exchanged $3,889,000 of its $20,000,000 7% subordinated convertible debt maturing in September 2006 for an equal amount of 5% subordinated convertible debt due in September 2013. It also redeemed $4,000,000 of the $20,000,000 7% subordinated convertible debt with borrowings under its credit facility. In connection with these events, the Company incurred a one-time charge of $130,000, before taxes, to write off the portion of deferred debenture debenture (dəbĕn`chər), document acknowledging indebtedness. In Great Britain a debenture is practically the same as a bond, and debenture stock is similar to preferred stock. costs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the 7% debentures that were exchanged as well as those redeemed. YEAR-TO-DATE RESULTS Net sales for the six months ended March 31, 2004, were $39,106,000 as compared to $33,016,000 for the same period of the prior fiscal year, an increase of 18%. Net earnings for the six months ended March 31, 2004, were $4,084,000, or $0.27 per diluted share, up 17% over the same period of prior fiscal year 2003. Diluted common shares outstanding for the six months of fiscal 2004 and 2003 were 15,225,000 and 14,820,000 respectively. CASH DIVIDEND MATTERS The Board of Directors declared the regular quarterly cash dividend of $0.10 per share for the first quarter ended March 31, 2004. The dividend is of record May 3, 2004 and payable May 10, 2004. The annual indicated cash dividend rate for fiscal 2004 is $0.40 per share, an increase of 11% over the $0.36 per share rate for fiscal 2003. Meridian Bioscience has increased its regular dividend rate eleven times since establishing a regular dividend policy thirteen years ago. During November 2002, the Board of Directors adopted a new dividend policy calling for an increased 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 net earnings. The fiscal 2004 indicated dividend Indicated Dividend The total dividends that would be paid on a share of stock throughout the next year if each dividend is the same amount as the previous payment. Notes: For example, if General Motors paid a dividend of $0. payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. rate reflects the Company's policy of paying out between 75% and 85% of each fiscal year's expected net earnings. The declaration and amount of dividends is 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 2004 GUIDANCE INCREASED Management expects net sales to be in the range of $73 to $77 million and per share diluted earnings to be between $0.50 and $0.55 for the fiscal year ending September 30, 2004. The per share estimates assume an increase in average shares outstanding from approximately 15.0 million at fiscal 2003 year end to 15.3 million at fiscal 2004 year end. The sales and earnings guidance provided in this press release does not include the impact of any acquisitions the Company might complete during fiscal 2004. FINANCIAL CONDITION The Company's financial condition is sound. At March 31, 2004, 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 $33,683,000 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 $17,643,000 thereby producing working capital of $16,040,000 and a current ratio of 1.9. Cash on hand was $1,566,000 and the Company had an unused borrowing capacity of $14,941,000 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 $16,624,000 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 $30,038,000. Subordinated convertible debt of $16,000,000 represented 96% 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 2004
and fiscal 2003 (in thousands, except per share data).
Three Months Ended Six Months Ended
March 31, March 31,
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2004 2003 2004 2003
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Net sales $20,940 $16,913 $39,106 $33,016
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Cost of goods sold
8,907 6,852 16,956 13,793
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Gross profit 12,033 10,061 22,150 19,223
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Operating expenses
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Research and development 1,195 1,064 2,167 1,975
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Sales and marketing 3,268 2,671 6,304 5,456
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General and administrative 3,589 2,542 6,505 5,246
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Total operating expenses 8,052 6,277 14,976 12,677
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Operating income 3,981 3,784 7,174 6,546
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Other income (expense), net (449) (505) (818) (902)
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Income before income taxes 3,532 3,279 6,356 5,644
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Income tax provision 1,243 1,356 2,272 2,297
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Net earnings $2,289 $1,923 $4,084 $3,347
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Net earnings per basic common share $0.15 $0.13 $0.28 $0.23
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Basic common shares outstanding 14,869 14,650 14,821 14,643
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Net earnings per diluted common share $0.15 $0.13 $0.27 $0.23
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Diluted common shares outstanding 15,284 14,876 15,225 14,820
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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, "Revenues for the second fiscal quarter of 2004 grew at a robust 24% rate and exceeded our internal expectations, both in total and on a per business unit basis. The key contributors to that growth included strong sales of our rapid tests for gastrointestinal infections as well as shipments of our highly purified biologicals to researchers and third party manufacturers. We also continued our focus on strengthening our management team and our quality systems. In January, Gregory Ballish joined the team as Vice President Sales and Marketing bringing leadership experience from the diagnostics and pharmaceutical industries. In February, Meridian received its ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 13485 certification recognized by over 75 countries as the standard of practice for medical device manufacturing. As we look forward, our R&D pipeline is expected to yield near-term new product introductions to support our second half goals. In addition, we anticipate further contributions from our Life Science business in the areas of vaccine manufacturing revenues and in the production and sale of new purified proteins. " William J. Motto, Chairman and Chief Executive Officer, said, "Based on our strong operating results for the first half of fiscal 2004 and the favorable outlook for the remainder of the fiscal year we have increased our guidance for both net sales and diluted earnings per share. Our sound capital structure has been further improved through our recent actions to exchange and redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. a portion of our subordinated 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. due September 2006. This action has also had the positive effect of reducing our interest expense. We remain committed to providing our shareholders with growth in cash dividends and the opportunity of higher share value through increased per share earnings. I look forward to reporting the results of the third and fourth quarters 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 accompanied by meaningful cautionary statements. Except for historical information, this report contains 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. which may be identified by words such as "estimates", "anticipates", "projects", "plans", "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, viral, urinary urinary /uri·nary/ (u´ri-nar?e) pertaining to, containing, or secreting urine. u·ri·nar·y adj. 1. Relating to urine and its production, function, or excretion. 2. 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 . All 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 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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