Meridian Bioscience Reports Record Third Quarter Sales, Higher Earnings, Declares Regular Dividend, and Reaffirms Fiscal 2004 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, Inc., (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 record third quarter sales of $18,256,000, a 16% increase over last year's third quarter; --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 $0.14, a 17% increase over the same period last year; --declared a regular cash dividend of $0.10 per share, 11% higher than the quarterly rate of fiscal 2003; and --reaffirmed its recently increased guidance of sales between $73 million and $77 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 $0.50 and $0.55 for the fiscal year ending September 30, 2004.
FINANCIAL HIGHLIGHTS
In Thousands, Except per Share Data
-----------------------------------
Three Months Ended June 30
2004 2003 % Change
------- ------- --------
Net Sales $18,256 $15,693 16%
Operating Income 3,366 3,068 10%
Net Earnings 2,157 1,822 18%
Earnings per Share (diluted) $ 0.14 $ 0.12 17%
Cash $ 2,656 $ 2,924
Working Capital 17,241 17,715
Long-term Debt Obligations 16,495 22,436
Shareholders' Equity 30,737 26,618
Total Assets 65,849 65,073
THIRD QUARTER RESULTS 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 for the third fiscal quarter ended June 30, 2004, were $18,256,000 as compared to $15,693,000 for the same period of the prior fiscal year, an increase of 16%. Net earnings for the third quarter of fiscal 2004 were $2,157,000 or $0.14 per diluted share, up 18% and 17%, respectively, over the third quarter of fiscal 2003. Diluted common shares outstanding for the third quarter of fiscal 2004 and 2003 were 15,260,000 and 15,012,000, 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 nine 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 one-time costs associated with relocating the new vice president of sales and marketing. The fiscal 2003 third quarter included insurance reimbursements, while the first six months of fiscal 2003 included favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. reserve adjustments, both of which reduced fiscal 2003 general and administrative expenses. YEAR-TO-DATE RESULTS Net sales for the nine months ended June 30, 2004, were $57,362,000 as compared to $48,709,000 for the same period of the prior fiscal year, an increase of 18%. Net earnings for the nine months ended June 30, 2004, were $6,241,000 or $0.41 per diluted share, up 21% and 17%, respectively, over the same period of fiscal year 2003. Diluted common shares outstanding for the nine months of fiscal 2004 and 2003 were 15,236,000 and 14,882,000, respectively. CASH DIVIDEND MATTERS The Board of Directors declared a regular quarterly dividend of $0.10 per share for the third quarter ended June 30, 2004. The dividend is of record August 2, 2004 and payable August 9, 2004. The annual 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 REAFFIRMED 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 June 30, 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 $33,318,000 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 $16,077,000 thereby producing working capital of $17,241,000 and a current ratio of 2:1. Cash on hand was $2,656,000 and the Company had an unused borrowing capacity of $18,028,000 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 $16,495,000 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 $30,737,000. Subordinated convertible debt of $16,000,000 represented 97% 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 Nine Months
Ended Ended
June 30, June 30,
2004 2003 2004 2003
--------------------------------
Net sales $18,256 $15,693 $57,362 $48,709
Cost of goods sold 7,355 6,563 24,311 20,356
--------------------------------
Gross profit 10,901 9,130 33,051 28,353
--------------------------------
Operating expenses
Research and development 1,050 985 3,217 2,960
Sales and marketing 3,077 2,654 9,389 8,110
General and administrative 3,408 2,423 9,950 7,669
--------------------------------
Total operating expenses 7,535 6,062 22,556 18,739
--------------------------------
Operating income 3,366 3,068 10,495 9,614
Other income (expense), net (399) (219) (1,172) (1,121)
--------------------------------
Income before income taxes 2,967 2,849 9,323 8,493
Income tax provision 810 1,027 3,082 3,324
--------------------------------
Net earnings $ 2,157 $ 1,822 $ 6,241 $ 5,169
================================
Net earnings per basic common share $ 0.14 $ 0.12 $ 0.42 $ 0.35
Basic common shares outstanding 14,899 14,664 14,846 14,650
Net earnings per diluted common share $ 0.14 $ 0.12 $ 0.41 $ 0.35
Diluted common shares outstanding 15,260 15,012 15,236 14,882
The following table sets forth the unaudited operating segment data
for the interim periods in fiscal 2004 and fiscal 2003 (in thousands).
Three Months Nine Months
Ended Ended
June 30, June 30,
2004 2003 2004 2003
--------------------------------
Net sales
U.S. Diagnostics $10,470 $8,793 $35,402 $29,198
European Diagnostics 4,086 3,627 11,619 10,500
Life Science 3,700 3,273 10,341 9,011
--------------------------------
$18,256 $15,693 $57,362 $48,709
================================
Operating Income
U.S. Diagnostics $1,784 $1,695 $7,582 $6,185
European Diagnostics 828 669 1,557 2,021
Life Science 751 811 1,407 1,490
Eliminations 2 (107) (51) (82)
--------------------------------
$3,366 $3,068 $10,495 $9,614
================================
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, "Strong contributions from each of our operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon resulted in increased revenues of 16%, supported by steady growth in our diagnostic products both in domestic and overseas markets, as well as expanding sales of new viral proteins and research reagents. As expected, our gross profit rates improved due to favorable product mix and continued focus on operating efficiencies. As we enter the fourth quarter, we anticipate continued overall strength bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. by contributions from new diagnostic test introductions as well as our vaccine production efforts in the Life Science unit." William J. Motto, Chairman and Chief Executive Officer, said, "We start our fourth quarter having reported three strong quarters of revenue and earnings growth. Our R&D pipeline is producing near-term revenue opportunities and our cGMP lab at VAI VAI Voest-Alpine Industrieanlagenbau (Austrian company) VAI Video As Input VAI Voluntary Action Indicated (US FDA) VAI Volleyball Association of Ireland VAI Video Assisted Instruction is expected to report its first revenue in the fourth quarter of fiscal 2004. To date, during fiscal 2004, we have reduced debt by almost $3 million dollars while continuing to invest in the business and provide our shareholders with an increased dividend over last year. I look forward to reporting record operating results for the fiscal year end and providing guidance for fiscal 2005." 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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