Meridian Bioscience, Inc. : Meridian Bioscience Reports Fourth Quarter and Full-Year 2011 Operating Results, Declares Regular Cash Dividend, and Reaffirms Fiscal 2012 Guidance
11/10/2011 | 07:35am
Meridian Bioscience, Inc. (NASDAQ: VIVO):
GENERAL HIGHLIGHTS
Meridian Bioscience, Inc., Cincinnati, Ohio (NASDAQ: VIVO) today:
reported fourth quarter and record full-year fiscal 2011 net sales of
$41.3 million and $159.7 million, respectively, increases of 16% and
12%, respectively, from the same periods of the prior fiscal year;
reported fourth quarter and full-year fiscal 2011 operating income of
$9.9 million and $40.0 million, respectively, an increase of 16% and a
decrease of 3%, respectively, from the same periods of the prior
fiscal year;
reported fourth quarter fiscal 2011 net earnings of $6.7 million, or
$0.16 per diluted share, increases of 26% and 23%, respectively,
compared to the fiscal 2010 fourth quarter. On a non-GAAP basis,
earnings were $7.4 million, or $0.18 per diluted share, excluding the
effect of costs associated with the consolidation of its Saco, Maine
operations into its Tennessee facility announced during the fourth
quarter of 2011(see non-GAAP financial measure reconciliation);
reported full-year fiscal 2011 net earnings of $26.8 million, or $0.65
per diluted share, an increase of 1% and flat, respectively, compared
to fiscal 2010. On a non-GAAP basis, earnings were $28.4 million, or
$0.69 per diluted share, excluding the effect of costs associated with
the announced consolidation of its Saco, Maine operations and costs
associated with the reorganization of European and Global Sales &
Marketing Leadership during the second quarter of fiscal 2011 (see
non-GAAP financial measure reconciliation);
declared the regular quarterly cash dividend of $0.19 per share for
the fourth quarter of fiscal 2011, (indicated annual rate of $0.76 per
share), the same as the regular quarterly rate of fiscal 2010;
announced the fiscal 2012 annual indicated cash dividend rate of $0.76
per share, the same as fiscal 2011; and
reaffirmed its fiscal 2012 guidance of per share diluted earnings
between $0.85 and $0.89 (excluding plant consolidation costs of
$0.01-$0.02) on net sales of $183 million to $192 million.
FINANCIAL HIGHLIGHTS (UNAUDITED) In
Thousands, Except per Share Data
Three Months Ended September 30,
Twelve Months Ended September 30,
2011
2010
Change
2011
2010
Change
Net Sales
$
41,349
$
35,539
16
%
$
159,723
$
143,000
12
%
Operating Income
9,850
8,481
16
%
40,033
41,138
-3
%
Net Earnings
6,710
5,322
26
%
26,831
26,647
1
%
Diluted Earnings per Share
$
0.16
$
0.13
23
%
$
0.65
$
0.65
-
%
Diluted Earnings per Share
excluding effect of European and
Global Sales & Marketing
Leadership reorganization costs
(Q2-11), Plant Consolidation costs
(Q4-11), and Bioline Group
transaction costs (Q3-10 & Q4-10)
(see non-GAAP financial measure
reconciliation)
$
0.18
$
0.15
20
%
$
0.69
$
0.68
1
%
September 30,
2011
2010
Cash and Equivalents
$
23,626
$
37,879
Working Capital
75,090
80,781
Shareholders' Equity
138,524
137,361
Total Assets
155,493
154,641
FOURTH QUARTER OPERATING RESULTS
Net sales for the fourth quarter of fiscal 2011 were $41,349,000,
compared to $35,539,000 for the same period of the prior fiscal year, an
increase of 16%. Net earnings for the fourth quarter of fiscal 2011 were
$6,710,000, or $0.16 per diluted share, increases of 26% and 23%,
respectively, compared to the fourth quarter of fiscal 2010. Diluted
common shares outstanding for the fourth quarter of fiscal 2011 and 2010
were 41,384,000 and 41,154,000, respectively. Excluding the effects of
the consolidation of the Saco, Maine operations announced during the
fiscal 2011 fourth quarter, net earnings for the quarter totaled
$7,401,000, or $0.18 per diluted share.
YEAR-TO-DATE OPERATING RESULTS
Net sales for the twelve months ended September 30, 2011 were
$159,723,000, compared to $143,000,000 for the same period of the prior
fiscal year, an increase of 12%. Net earnings for the twelve months
ended September 30, 2011 were $26,831,000, or $0.65 per diluted share,
an increase of 1% and flat, respectively, compared to the twelve months
ended September 30, 2010. Diluted common shares outstanding for the
twelve months of fiscal 2011 and 2010 were 41,358,000 and 41,149,000,
respectively. Excluding the effects of the consolidation of the Saco,
Maine operations announced during the fourth quarter of fiscal 2011 and
of reorganizing the European and Global Sales & Marketing Leadership
during the second quarter of fiscal 2011, net earnings for full-year
2011 totaled $28,394,000, or $0.69 per diluted share.
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, 2011. The
dividend is payable December 1, 2011 to shareholders of record on
November 21, 2011. The Board of Directors has approved the indicated
regular quarterly cash dividend rate of $0.19 per share for fiscal 2012,
an annual indicated rate of $0.76 per share, the same as fiscal 2011.
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 2012 GUIDANCE REAFFIRMED
For the fiscal year ending September 30, 2012, management expects net
sales to be in the range of $183 million to $192 million and per share
diluted earnings to be between $0.85 and $0.89. The per share estimates
assume an increase in average diluted shares outstanding from
approximately 41.4 million at fiscal 2011 year end to 41.5 at fiscal
2012 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 2012 or charges of $0.01-$0.02 diluted
earnings per share in fiscal 2012 associated with the consolidation of
its Maine operations into its Tennessee facility.
FINANCIAL CONDITION
The Company's financial condition is sound. At September 30, 2011,
current assets were $90.4 million compared to current liabilities of
$15.3 million, resulting in working capital of $75.1 million and a
current ratio of 5.9. Cash and short-term investments were $23.6 million
and the Company had 100% borrowing capacity under its $30,000,000
commercial bank credit facility. The Company has no bank-debt
obligations outstanding.
FOURTH QUARTER AND FISCAL 2011 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 2011 and fiscal 2010.
Three Months Ended
Twelve Months Ended
September 30,
September 30,
2011
2010
2011
2010
Net sales
$
41,349
$
35,539
$
159,723
$
143,000
Cost of sales
16,352
14,272
59,916
54,304
Cost of sales - Plant Consolidation
509
-
509
-
Gross profit
24,488
21,267
99,298
88,696
Operating expenses
Research and development
2,501
1,952
9,822
8,396
Selling and marketing
5,660
4,996
22,772
18,250
General and administrative
5,929
5,272
24,883
19,672
European and Global Sales & Marketing Leadership reorganization
costs
-
-
1,240
-
Plant Consolidation costs
548
-
548
-
Bioline Group transaction costs
-
566
-
1,240
Total operating expenses
14,638
12,786
59,265
47,558
Operating income
9,850
8,481
40,033
41,138
Other income (expense), net
40
189
467
262
Income before income taxes
9,890
8,670
40,500
41,400
Income tax provision
3,180
3,348
13,669
14,753
Net earnings
$
6,710
$
5,322
$
26,831
$
26,647
Net earnings per basic common share
$
0.16
$
0.13
$
0.66
$
0.66
Basic common shares outstanding
40,839
40,543
40,715
40,515
Net earnings per diluted common share
$
0.16
$
0.13
$
0.65
$
0.65
Diluted common shares outstanding
41,384
41,154
41,358
41,149
The following table sets forth the unaudited operating segment data for
the interim and annual periods in fiscal 2011 and fiscal 2010 (in
thousands).
Three Months Ended
Twelve Months Ended
September 30,
September 30,
2011
2010
2011
2010
Net sales
U.S. Diagnostics
$
25,126
$
22,002
$
97,133
$
92,020
European Diagnostics
5,261
4,938
24,187
24,041
Life Science
10,962
8,599
38,403
26,939
$
41,349
$
35,539
$
159,723
$
143,000
Operating Income
U.S. Diagnostics
$
8,411
$
6,627
$
35,191
$
33,432
European Diagnostics
418
578
2,199
3,367
Life Science
1,096
639
2,595
3,615
Eliminations
(75)
637
48
724
$
9,850
$
8,481
$
40,033
$
41,138
COMPANY COMMENTS
John A. Kraeutler, Chief Executive Officer, said, "Fiscal 2011
represented a year in which we fine-tuned our focus on those key areas
of Meridian's business that are expected to drive our longer term
growth. For our diagnostics business this included tests for H. pylori
infection, tests for foodborne pathogens and our new, simple molecular
amplification platform, illumigene®. Our Life
Science business is being driven by rapid organic growth from the
Bioline products. Due to this clear focus we are making the decisions
necessary to streamline or reposition other areas of Meridian's business
that have slowed down in recent years so that fiscal 2012 and beyond can
be built upon predictable strategic growth drivers.
Q4 results began to show the early results of our efforts. Our H.
pylori business continued its consistent contributions and expanded
by 10% worldwide, with USDx growing by 12%. Our foodborne category
achieved 27% growth in the quarter and registered a 36% increase for the
full fiscal year. The illumigene test for C. difficile
led this disease category with growth of 24% worldwide, 29% in the USDx
regions alone...and, Bioline continued its consistent success and
contributed nearly $4 million in revenues in Q4 to finish fiscal 2011 up
17% from the prior year.
Longer term, our business is dependent upon technological innovation
that can improve diagnosis and detection while materially reducing the
total costs of healthcare. To that end, we are awaiting FDA clearance to
market two new tests; illumigene GBS (Streptococcus Group
B) used in helping detect colonization in prenatals and ImmunoCard
STAT!® GDH, a rapid cost-effective screening test for C.
difficile infection. In addition, we expect two to three additional illumigene
tests to be launched later this year along with a rapid immunoassay, TRU
Legionella, which has already begun shipping to international customers.
Bioline has continued to lead Meridian's Life Science unit with
innovation in molecular components like SensiFAST? and MyTaq?. These
novel products add speed and accuracy for researchers and manufacturers
that are designing and developing new molecular methods.
Specifically with regard to illumigene, we added
approximately 150 placements since our last update for a global total of
just over 650. Our test usage per customer continues to hold at around
2000 tests per year and pricing is stable. The near-term launch of illumigene
GBS and the anticipated introductions of illumigene
Mycoplasma pneumonia, illumigene Group A Strep and illumigene
Pertussis for whooping cough later in the year make this unique
molecular technology ideal for consideration by every clinical
laboratory.
Moving ahead, we believe that the decisions and actions taken over the
past 18 months have provided a clear path for success in fiscal 2012 and
beyond."
William J. Motto, Executive Chairman of the Board, said, "As Jack
Kraeutler has indicated, there were many accomplishments during the past
fiscal year and we look forward to achieving higher sales and net
earnings for fiscal 2012. We continue to look for ways to improve
efficiencies, drive down costs, introduce new innovative products, and
expand sales. Our most recent acquisition, Bioline one year ago, has
worked out very well and we continue to look for other acquisition
opportunities. Meridian's balance sheet is sound and cash flow
comfortably supports our capital expenditures, working capital, and cash
dividend requirements. Our illumigene molecular testing
platform is being well received and shows great promise."
NON-GAAP FINANCIAL MEASURES
In this press release, we have provided information on net earnings and
diluted earnings per share excluding the effect of costs associated with
the announced consolidation of our Saco, Maine operations into our
Tennessee facility and the reorganization of our European and Global
Sales & Marketing Leadership. We believe this information is useful to
an investor in evaluating our performance because:
These measures help investors to more meaningfully evaluate and
compare the results of operations from period to period by removing
the impact of non-routine costs related to consolidating the Maine
operations and reorganizing our European and Global Sales & Marketing
Leadership; and
These measures are used by our management for various purposes,
including evaluating performance against incentive bonus achievement
targets, comparing performance from period to period in presentations
to our board of directors, and as a basis for strategic planning and
forecasting.
We have provided reconciliations of net earnings, basic earnings per
share and diluted earnings per share, with and without the effects of
the plant consolidation and leadership reorganization costs noted above,
in the tables below for the fourth quarter and full-year fiscal 2011.
FOURTH QUARTER AND FISCAL YEAR GAAP TO NON-GAAP
RECONCILIATION TABLES (In Thousands, Except per Share Data)
Three
Twelve
Months Ended
Months Ended
September 30,
September 30,
2011
2011
Net earnings -
U.S. GAAP basis
$
6,710
$
26,831
European and Global Sales & Marketing
Leadership Reorganization costs
-
872
Plant Consolidation costs
691
691
Excluding Reorganization and Plant Consolidation costs
$
7,401
$
28,394
Net Earnings per Basic earnings per share -
U.S. GAAP basis
$
0.16
$
0.66
European and Global Sales & Marketing
Leadership Reorganization costs
-
0.02
Plant Consolidation costs
0.02
0.02
Excluding Reorganization and Plant Consolidation costs
$
0.18
$
0.70
Net Earnings per Diluted earnings per share -
U.S. GAAP basis
$
0.16
$
0.65
European and Global Sales & Marketing
Leadership Reorganization costs
-
0.02
Plant Consolidation costs
0.02
0.02
Excluding Reorganization and Plant Consolidation costs
$
0.18
$
0.69
FORWARD LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe
harbor from civil litigation for forward-looking statements accompanied
by meaningful cautionary statements. Except for historical information,
this report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, 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, whether expressed or
implied, are based upon current expectations of the Company and speak
only as of the date made. The Company assumes no obligation to publicly
update or revise any forward-looking statements even if experience or
future changes make it clear that any projected results expressed or
implied therein will not be realized. These statements are subject to
various risks, uncertainties and other factors that could cause actual
results to differ materially, 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. 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, can make results difficult to predict. 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 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 effects 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 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,
veterinary testing centers, diagnostics manufacturers and biotech
companies in more than 60 countries around the world. The Company's
shares are traded through NASDAQ's Global Select Market, symbol VIVO.
Meridian's website address is www.meridianbioscience.com.
Meridian Bioscience, Inc. John A. Kraeutler, Chief Executive
Officer, 513-271-3700
