Form 8-K
MERIDIAN BIOSCIENCE INC false 0000794172 0000794172 2020-08-07 2020-08-07

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) August 7, 2020

 

 

 

LOGO

MERIDIAN BIOSCIENCE, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Ohio   0-14902   31-0888197

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

3471 River Hills Drive,

Cincinnati, Ohio

  45244
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (513) 271-3700

(Former Name or Former Address, if Changed Since Last Report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, no par value   VIVO   NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17CFR §240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act  ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition.

On August 7, 2020, Meridian Bioscience, Inc. (“Meridian” or the “Company”) issued a press release announcing results for the third quarter ended June 30, 2020. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated by reference herein.

 

Item 7.01.

Regulation FD Disclosure.

On August 7, 2020, Meridian is hosting a conference call for the benefit of its investors to discuss the results set forth in the earnings release and other business and financial developments. A copy of the presentation, which is available at www.meridianbioscience.com, related to this conference call is attached as Exhibit 99.2 to this report and is incorporated by reference herein.

The Company’s press release and presentation disclose certain financial results both in accordance with generally accepted accounting principles (“GAAP”) and on a non-GAAP basis with adjustments for certain items. The Company’s management believes that presentation of these non-GAAP financial measures and their related reconciliations are useful to investors because the non-GAAP financial measures provide investors with a basis for comparing the results to financial results from prior periods.

Information in the press release and presentation contains forward-looking statements regarding future events and performance of the Company. All such forward-looking statements are based largely on the Company’s experience and perception of current conditions, trends, expected future developments and other factors, and on management’s expectations, and are subject to risks and uncertainties that could cause actual results to differ materially, including, but not limited to, those factors described in the presentation and in the Company’s filings with the Securities and Exchange Commission. The Company disclaims any intention or obligation to update or revise any financial or other projections or other forward-looking statements, whether because of new information, future events or otherwise.

The information in each of Item 2.02 and Item 7.01 of this Form 8-K and in the press release attached as Exhibit 99.1 and the presentation attached as Exhibit 99.2 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in each of Item 2.02 and Item 7.01 of this Form 8-K and each of Exhibit 99.1 and Exhibit 99.2 shall not be incorporated by reference in any filing (whether made before or after the date hereof) or any other document under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in any such filing or document.

 

Item 9.01.

Financial Statements and Exhibits.

(d)    Exhibits

 

99.1    Press Release dated August 7, 2020
99.2    Conference Call Presentation


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

      MERIDIAN BIOSCIENCE, INC.
Date: August 7, 2020               

By: /s/ Bryan T. Baldasare

      Executive Vice President and Chief Financial Officer
      (Principal Financial and Accounting Officer)
EX-99.1

Exhibit 99.1

 

LOGO

For Immediate Release

MERIDIAN BIOSCIENCE REPORTS FISCAL THIRD QUARTER 2020 OPERATING RESULTS – BEST QUARTER IN COMPANY HISTORY – RAISES FULL YEAR GUIDANCE

CINCINNATI, OHIO August 7, 2020 (GLOBE NEWSWIRE) — Meridian Bioscience, Inc. (NASDAQ: VIVO) today announced financial results for the fiscal third quarter ended June 30, 2020.

Third Quarter Fiscal 2020 Highlights:

 

   

Consolidated Net Revenue of $84.8 million, up 75% year-over-year

 

   

Life Science segment delivers record revenue of $63.2 million, up 312% year-over-year, as a result of strong demand for COVID-19 related products

 

   

Broadened the Life Science portfolio of COVID-19 related products to include key reagents used by diagnostics manufacturers to develop rapid antigen tests

 

   

Diagnostics segment limited to $21.6 million in revenue, in line with expectations and a 35% year-over-year decline, as stay-at-home orders reduced demand for non-critical care testing

 

   

Completed assay design lock in the development of a PCR COVID-19 test on the Revogene® system and expecting submission to the FDA for EUA approval this fall

 

   

Re-initiated clinical trials for key GI products (GI panel, C. diff, Campylobacter), although at a slower-than-normal pace

 

   

Closed the acquisition of Exalenz and the integrated commercial team placed the first BreathID® Smart System since receiving FDA approval in March

Jack Kenny, Chief Executive Officer, commented: “The diversification of our business turned what could have been a challenging quarter into a record for the Company. Our team executed well in the short-term while continuing to invest in our strategy, positioning us well for a strong FY2021.”

Bryan Baldasare, Chief Financial Officer, commented: “Record revenue and strong margins in our Life Science segment drove cash generation, further strengthening our balance sheet. Our unprecedented earnings demonstrates the power of scale in our operations.”

Third Quarter Fiscal 2020 Results (Comparison to Third Quarter Fiscal 2019)

Consolidated net revenue for the third quarter of fiscal 2020 increased 75% to $84.8 million, compared to $48.4 million in the third quarter of 2019. Diagnostics segment revenues were down 35%, in line with expectations, while Life Science segment revenues were up 312%. Our Diagnostics segment experienced a 46% decrease in revenues from our molecular products and revenues from our immunoassay/blood chemistry products decreased 32%. Our Life Science segment revenues for the quarter included $47.8 million in revenue from COVID-19 related products with $32.0 million coming from molecular products and $15.8 million coming from immunological products.

Reported operating income for the third quarter of fiscal 2020 was $34.7 million, reflecting strong leverage from record sales levels in our Life Science business. Operating expenses include: (i) expectedly higher research and development spending in the Diagnostics segment; (ii) acquisition-related costs in connection with the recent Exalenz acquisition; and (iii) purchase accounting amortization related to the acquisitions of Exalenz and the GenePOC business in April 2020 and June 2019, respectively, as well as a favorable adjustment in the fair value of the earnout obligation for the acquisition of the GenePOC business. On an adjusted basis, operating income was $30.4 million, a margin of 36% (see non-GAAP financial measure reconciliation below).

Earnings per diluted share on a reported GAAP basis totaled $0.64 for the third quarter of 2020, and adjusted earnings per diluted share totaled $0.55 for the quarter (see non-GAAP financial measure reconciliation below).


Raising Fiscal 2020 Guidance

Our performance in the third quarter exceeded our expectations and we are raising our guidance for the year.

FY2020 Net Revenues:

 

   

Consolidated $245 million to $250 million

 

   

Life Science $127 million to $130 million

 

   

Diagnostics $118 million to $120 million

FY2020 Adjusted Operating Margin: Consolidated 22% to 23%

FY2020 Adjusted Earnings Per Share on a Diluted Basis: $1.01 to $1.05 (42.2M shares)

The revenue component of this guidance anticipates that our Life Science business will benefit from COVID-19 related demand ranging from $12 million to $15 million in the fourth quarter. As we have only recently begun sampling reagents for use in rapid antigen tests, our revenue guidance for Life Science has a limited contribution from these products. For the Diagnostics business, our guidance assumes continued softness in demand at a 20% reduction in volumes for our fourth fiscal quarter versus the prior year. Overall operating expenses on an adjusted basis for the full year are expected to be commensurate with our original guidance, as additional cash incentive compensation and operating costs of the Exalenz acquisition will offset lower spending on travel and delayed clinical trials. Importantly, we expect spending on clinical trials in the fourth fiscal quarter of approximately $3 million, as trial sites continue to re-start through the quarter.

This guidance reflects our current visibility into market conditions and customer order patterns for our products and our current assumptions about the impacts from resurgence of COVID-19 infections in the U.S. and around the globe.

Financial Condition

At June 30, 2020, cash and equivalents were $63.4 million and the Company had $61.2 million of borrowing capacity under its $160.0 million commercial bank credit facility. The Company’s bank-debt obligations under the bank credit facility totaled $98.8 million as of June 30, 2020.

Conference Call Information

Jack Kenny, Chief Executive Officer, and Bryan Baldasare, Executive Vice President and Chief Financial Officer, will host a conference call on Friday, August 7, 2020 beginning at 10:00 a.m. Eastern Time to discuss the third quarter financial results and answer questions. A presentation to accompany the third quarter financial results and related discussion will be made available within the Investor Relations section of the Company’s website, www.meridianbioscience.com, prior to the conference call.

To participate in the live call by telephone from the U.S., dial (866) 443-5802, or from outside the U.S., dial (513) 360-6924, and enter the audience pass code 9464209. A replay will be available for 14 days beginning at 1:00 p.m. Eastern Time on August 7, 2020 by dialing (855) 859-2056 or (404) 537-3406 and entering pass code 9464209.


INTERIM 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 periods of fiscal 2020 and fiscal 2019.

 

     Three Months Ended      Nine Months Ended  
     June 30,      June 30,  
     2020      2019      2020      2019  

Net revenues

   $ 84,797    $ 48,440    $ 189,514    $ 150,168

Cost of sales

     28,945      20,181      71,768      60,999
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

     55,852      28,259      117,746      89,169
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating expenses

           

Research and development

     6,743      4,594      16,953      12,294

Selling and marketing

     6,261      6,747      19,459      21,221

General and administrative

     12,439      8,002      31,675      24,288

Acquisition-related costs

     1,641      473      3,428      1,445

Change in fair value of contingent consideration obligation

     (6,124      —        (7,428      —  

Restructuring costs

     93      1,801      620      1,701

Selected legal costs

     134      178      1,189      1,370
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating expenses

     21,187        21,795      65,896      62,319
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

     34,665      6,464      51,850      26,850

Other income (expense), net

     208      14      (304      (649
  

 

 

    

 

 

    

 

 

    

 

 

 

Earnings before income taxes

     34,873      6,478      51,546      26,201

Income tax provision

     7,366      1,399      11,853      5,922
  

 

 

    

 

 

    

 

 

    

 

 

 

Net earnings

   $ 27,507    $ 5,079    $ 39,693    $ 20,279
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic earnings per common share

   $ 0.64    $ 0.12    $ 0.93    $ 0.48

Basic common shares outstanding

     42,837      42,639      42,819      42,526

Diluted earnings per common share

   $ 0.64    $ 0.12    $ 0.92    $ 0.47

Diluted common shares outstanding

     43,273      42,910      43,038      42,907

Adjusted Financial Measures

           

(see non-GAAP financial measure reconciliation below)

           

Operating income

   $ 30,409    $ 8,916    $ 49,659    $ 31,366

Net earnings

     24,014      6,960      38,197      23,743

Diluted earnings per common share

   $ 0.55    $ 0.16    $ 0.89    $ 0.55


Condensed Balance Sheet Data

 

     June 30,  
     2020      2019  

Cash and equivalents

   $ 63,445    $ 55,192

Working capital

     130,705      117,567

Long-term debt

     98,824      75,824

Shareholders’ equity

     233,335      188,553

Total assets

     419,787      322,436

Segment Data

The following table sets forth the unaudited revenue and segment data for the interim periods in fiscal 2020 and fiscal 2019 (in thousands), noting that “non-molecular assays” is comprised of traditional immunoassays, blood chemistry assays and urea breath assays.

 

     Three Months Ended      Nine Months Ended  
     June 30,      June 30,  
     2020      2019      2020      2019  

Net Revenues - By Product Platform/Type

           

Diagnostics

           

Molecular assays

   $ 3,182    $ 5,894    $ 17,259    $ 20,208

Non-molecular assays

     18,416      27,224      74,072      83,075
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Diagnostics

     21,598      33,118      91,331      103,283
  

 

 

    

 

 

    

 

 

    

 

 

 

Life Science

           

Molecular reagents

     38,784      5,495      55,691      17,495

Immunological reagents

     24,415      9,827      42,492      29,390
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Life Science

     63,199      15,322      98,183      46,885
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Net Revenues

   $ 84,797    $ 48,440    $ 189,514    $ 150,168
  

 

 

    

 

 

    

 

 

    

 

 

 

Net Revenues - By Disease State/Geography

           

Diagnostics

           

Gastrointestinal assays

   $ 9,584    $ 17,232    $ 39,644    $ 52,024

Respiratory illness assays

     5,052      5,708      23,664      21,242

Blood chemistry assays

     3,364      4,666      12,508      13,364

Other

     3,598      5,512      15,515      16,653
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Diagnostics

     21,598      33,118      91,331      103,283
  

 

 

    

 

 

    

 

 

    

 

 

 

Life Science

           

Americas

     22,015      4,369      30,642      14,347

EMEA

     26,070      6,389      40,977      21,608

ROW

     15,114      4,564      26,564      10,930
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Life Science

     63,199      15,322      98,183      46,885
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Net Revenues

   $ 84,797    $ 48,440    $ 189,514    $ 150,168
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Geographic Regions

 

Americas = North and Latin America

EMEA = Europe, Middle East and Africa

ROW = Rest of World

           


     Three Months Ended      Nine Months Ended  
     June 30,      June 30,  
     2020      2019      2020      2019  

OPERATING INCOME

           

Diagnostics

   $ (2,731    $ 5,731    $ 6,469    $ 22,330

Life Science

     40,253      3,639      53,182      12,906

Corporate

     (2,849      (2,929      (7,832      (8,450

Eliminations

     (8      23      31      64
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Operating Income

   $ 34,665    $ 6,464    $ 51,850    $ 26,850
  

 

 

    

 

 

    

 

 

    

 

 

 

NON-GAAP FINANCIAL MEASURES

In this press release, we have supplemented our reported GAAP financial information with information on operating expenses, operating income, net earnings, basic earnings per share and diluted earnings per share excluding the effects of acquisition-related costs, a favorable change in fair value of the contingent consideration obligation, restructuring costs, and selected legal costs, each of which is a non-GAAP measure. We have provided in the tables below reconciliations to the operating expenses, operating income, net earnings, basic earnings per share and diluted earnings per share amounts reported under U.S. Generally Accepted Accounting Principles for the third quarters and nine-month periods ended June 30, 2020 and June 30, 2019.

We believe this information is useful to an investor in evaluating our performance because:

 

  1.

These measures help investors to more meaningfully evaluate and compare the results of operations from period to period by removing the impacts of these non-routine items; and

 

  2.

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.

These non-GAAP measures may be different from non-GAAP measures used by other companies. In addition, the non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations, in that they do not reflect all amounts associated with our results as determined in accordance with U.S. GAAP. Therefore, these measures should only be used to evaluate our results in conjunction with corresponding GAAP measures.


THIRD QUARTER AND NINE MONTH YEAR-TO-DATE

GAAP TO NON-GAAP RECONCILIATION TABLES

(In Thousands, Except per Share Data)

 

     Three Months      Nine Months  
     Ended June 30,      Ended June 30,  
     2020      2019      2020      2019  

Operating Expenses -

           

U.S. GAAP basis

   $ 21,187    $ 21,795    $ 65,896    $ 62,319

Acquisition-related costs

     (1,641      (473      (3,428      (1,445

Change in fair value of contingent consideration obligation

     6,124      —        7,428      —  

Restructuring costs

     (93      (1,801      (620      (1,701

Selected legal costs

     (134      (178      (1,189      (1,370
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted Operating Expenses

   $ 25,443    $ 19,343    $ 68,087    $ 57,803
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating Income -

           

U.S. GAAP basis

   $ 34,665    $ 6,464    $ 51,850    $ 26,850

Acquisition-related costs

     1,641      473      3,428      1,445

Change in fair value of contingent consideration obligation

     (6,124      —        (7,428      —  

Restructuring costs

     93      1,801      620      1,701

Selected legal costs

     134      178      1,189      1,370
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted Operating Income

   $ 30,409    $ 8,916    $ 49,659    $ 31,366
  

 

 

    

 

 

    

 

 

    

 

 

 

Net Earnings -

           

U.S. GAAP basis

   $ 27,507    $ 5,079    $ 39,693    $ 20,279

Acquisition-related costs, including gain on currency hedge of purchase price *

     959      363      2,746      1,108

Change in fair value of contingent consideration obligation *

     (4,623      —        (5,608      —  

Restructuring costs *

     70      1,381      468      1,305

Selected legal costs *

     101      137      898      1,051
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted Earnings

   $ 24,014    $ 6,960    $ 38,197    $ 23,743
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic Earnings per Common Share -

           

U.S. GAAP basis

   $ 0.64    $ 0.12    $ 0.93    $ 0.48

Acquisition-related costs, including gain on currency hedge of purchase price

     0.02      0.01      0.06      0.03

Change in fair value of contingent consideration obligation

     (0.11      —        (0.13      —  

Restructuring costs

     —        0.03      0.01      0.03

Selected legal costs

     —        —        0.02      0.02
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted Basic EPS **

   $ 0.56    $ 0.16    $ 0.89    $ 0.56
  

 

 

    

 

 

    

 

 

    

 

 

 


     Three Months      Nine Months  
     Ended June 30,      Ended June 30,  
     2020      2019      2020      2019  

Diluted Earnings per Common Share -

           

U.S. GAAP basis

   $ 0.64    $ 0.12    $ 0.92    $ 0.47

Acquisition-related costs, including gain on currency hedge of purchase price

     0.02      0.01      0.06      0.03

Change in fair value of contingent consideration obligation

     (0.11      —        (0.13      —  

Restructuring costs

     —        0.03      0.01      0.03

Selected legal costs

     —        —        0.02      0.02
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted Diluted EPS ***

   $ 0.55    $ 0.16    $ 0.89    $ 0.55
  

 

 

    

 

 

    

 

 

    

 

 

 

 

*

Net of tax.

**

Basic Earnings per Common Share for the three months ended June 30, 2020 does not sum to the total Adjusted Basic EPS due to rounding.

***

Diluted Earnings per Common Share for the nine months ended June 30, 2020 does not sum to the total Adjusted Diluted EPS due to rounding.

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 “continues”, “estimates”, “anticipates”, “projects”, “plans”, “seeks”, “may”, “will”, “expects”, “intends”, “believes”, “signals”, “should”, “can” and similar expressions or the negative versions thereof and which also may be identified by their context. All statements that address operating performance or events or developments that Meridian expects or anticipates will occur in the future, including, but not limited to, statements relating to per share diluted earnings, sales, product demand, revenue, operating margin, other guidance and the impact of COVID-19 on our business and prospects, are forward-looking statements. Such statements, whether expressed or implied, are based upon current expectations of the Company and speak only as of the date made. Specifically, Meridian’s forward-looking statements are, and will be, based on management’s then-current views and assumptions regarding future events and operating performance. Meridian 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 operating results, financial condition and 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, its ability to effectively sell such products and its ability to successfully expand and effectively manage increased sales and marketing operations. While Meridian has introduced a number of internally developed products and acquired products, there can be no assurance that it will be successful in the future in introducing such products on a timely basis or in protecting its intellectual property, and unexpected or costly manufacturing costs associated with its introduction of new products or acquired products could cause actual results to differ from expectations. Meridian relies on proprietary, patented and licensed technologies. As such, 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, as can the uncertainty of regulatory approvals and the regulatory process (including the currently ongoing study and other FDA actions regarding the Company’s LeadCare products). The international scope of Meridian’s operations, including changes in the relative strength or weakness of the U.S. dollar and general economic conditions in foreign countries, can impact results and make them difficult to predict. One of Meridian’s 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. Meridian cannot predict the outcome of future goodwill impairment testing and the impact of possible goodwill impairments on Meridian’s earnings and financial results. Meridian cannot predict the possible impact of U.S. health care legislation enacted in 2010 – the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act – and any modification or repeal of any of the provisions thereof initiated by Congress or the presidential administration, and any similar initiatives in other countries on its results of operations. Efforts to reduce the U.S. federal deficit, breaches of Meridian’s information technology systems, trade wars, increased tariffs, and natural disasters and other events could have a materially adverse effect on Meridian’s results of operations and revenues. In the past, the Company has identified a material weakness in our internal control over financial reporting, which has been remediated, but the Company can make no assurances that a material weakness will not be identified in the future, which if identified and not properly corrected, could materially adversely affect our operations and result in material misstatements in our financial statements. Meridian also is subject to risks and uncertainties related to disruptions to or reductions in business operations or prospects due to pandemics, epidemics, widespread health emergencies, or outbreaks of infectious diseases such as the coronavirus disease COVID-19. In addition to the factors described in this paragraph, as well as those factors identified from time to time in our filings with the Securities and Exchange Commission, Part I, Item 1A Risk Factors of our most recent Annual Report on Form 10-K contains a list and description of uncertainties, risks and other matters that may affect the Company. Readers should carefully review these forward-looking statements and risk factors, and not place undue reliance on our forward-looking statements.

About Meridian Bioscience, Inc.

Meridian is a fully integrated life science company that develops, manufactures, markets and distributes a broad range of innovative diagnostic products. We are dedicated to developing and delivering better solutions that give answers with speed, accuracy and simplicity that are redefining the possibilities of life from discovery to diagnosis. Through discovery and development, we provide critical life science raw materials used in immunological and molecular tests for human, animal, plant, and environmental applications. Through diagnosis, we provide diagnostic solutions in areas including gastrointestinal and upper respiratory infections and blood lead level testing. We build relationships and provide solutions to hospitals, reference laboratories, research centers, veterinary testing centers, physician offices, diagnostics manufacturers, and biotech companies in more than 70 countries around the world.

Meridian’s shares are traded on the NASDAQ Global Select Market, symbol VIVO. Meridian’s website address is www.meridianbioscience.com.

Contact:

Charlie Wood

Vice President – Investor Relations

Meridian Bioscience, Inc.

Phone: +1 513.271.3700

Email: mbi@meridianbioscience.com

###

EX-99.2

Slide 1

FY2020 Q3 Results August 7, 2020 Exhibit 99.2


Slide 2

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 presentation 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 “continues”, “estimates”, “anticipates”, “projects”, “plans”, “seeks”, “may”, “will”, “expects”, “intends”, “believes”, “signals”, “should”, “can” and similar expressions or the negative versions thereof and which also may be identified by their context. All statements that address operating performance or events or developments that Meridian expects or anticipates will occur in the future, including, but not limited to, statements relating to per share diluted earnings, sales, product demand, revenue, operating margin, other guidance and the impact of COVID-19 on our business and prospects, are forward-looking statements. Such statements, whether expressed or implied, are based upon current expectations of the Company and speak only as of the date made. Specifically, Meridian’s forward-looking statements are, and will be, based on management’s then-current views and assumptions regarding future events and operating performance. Meridian 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 operating results, financial condition and 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, its ability to effectively sell such products and its ability to successfully expand and effectively manage increased sales and marketing operations. While Meridian has introduced a number of internally developed products and acquired products, there can be no assurance that it will be successful in the future in introducing such products on a timely basis or in protecting its intellectual property, and unexpected or costly manufacturing costs associated with its introduction of new products or acquired products could cause actual results to differ from expectations. Meridian relies on proprietary, patented and licensed technologies. As such, 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, as can the uncertainty of regulatory approvals and the regulatory process (including the currently ongoing study and other FDA actions regarding the Company’s LeadCare products). The international scope of Meridian’s operations, including changes in the relative strength or weakness of the U.S. dollar and general economic conditions in foreign countries, can impact results and make them difficult to predict. One of Meridian’s 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. Meridian cannot predict the outcome of future goodwill impairment testing and the impact of possible goodwill impairments on Meridian’s earnings and financial results. Meridian cannot predict the possible impact of U.S. health care legislation enacted in 2010 – the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act – and any modification or repeal of any of the provisions thereof initiated by Congress or the presidential administration, and any similar initiatives in other countries on its results of operations. Efforts to reduce the U.S. federal deficit, breaches of Meridian’s information technology systems, trade wars, increased tariffs, and natural disasters and other events could have a materially adverse effect on Meridian’s results of operations and revenues. In the past, the Company has identified a material weakness in our internal control over financial reporting, which has been remediated, but the Company can make no assurances that a material weakness will not be identified in the future, which if identified and not properly corrected, could materially adversely affect our operations and result in material misstatements in our financial statements. Meridian also is subject to risks and uncertainties related to disruptions to or reductions in business operations or prospects due to pandemics, epidemics, widespread health emergencies, or outbreaks of infectious diseases such as the coronavirus disease COVID-19. In addition to the factors described in this paragraph, please also refer to additional factors identified from time to time in our filings with the Securities and Exchange Commission, including in Part I, Item 1A Risk Factors of our most recent Annual Report on Form 10-K, which contains a list and description of uncertainties, risks and other matters that may affect the Company. Readers should carefully review these forward-looking statements and risk factors, and not place undue reliance on our forward-looking statements. Forward Looking Statements


Slide 3

Certain financial measures presented in this presentation, such as operating expenses, operating income, operating margin, net earnings and earnings per diluted share, excluding as applicable the effects of acquisition-related costs, a change in fair value of contingent consideration obligation, restructuring costs and selected legal costs, are not recognized under generally accepted accounting principles in the United States of America, or U.S. GAAP. Management believes this non-GAAP financial information is useful to an investor in evaluating our performance, as these measures: (i) help investors to more meaningfully evaluate and compare the results of operations from period to period by removing the impacts of these non-routine items; and (ii) are used by management for various purposes, including evaluating performance from period to period in presentations to our board of directors, and as a basis for strategic planning and forecasting. While we believe these financial measures are commonly used by investors to evaluate our performance and that of our competitors, the non-GAAP measures in this presentation may be different from non-GAAP measures used by other companies and should not be considered as an alternative to performance measures derived in accordance with U.S. GAAP. In addition, the non-GAAP measures presented herein are not based on any comprehensive set of accounting rules or principles. These non-GAAP measures have limitations, in that they do not reflect all amounts associated with our results as determined in accordance with U.S. GAAP, and they should not be considered as alternatives to information attributable to Meridian Bioscience, Inc. determined in accordance with U.S. GAAP. See the consolidated financial statements included in our reports filed with the U.S. Securities and Exchange Commission for our U.S. GAAP results. Additionally, for reconciliations of the non-GAAP measures included herein to our closest reported U.S. GAAP measures, refer to the reconciliations included in the press release of Meridian Bioscience, Inc. dated August 7, 2020. Non-GAAP Financial Measures


Slide 4

Life Science COVID-19 related products drive record growth Completed assay design lock for Revogene® COVID-19 assay Re-initiated clinical trials for three key GI products Closed acquisition of Exalenz – Integrated commercial team Q3 FY2020 Business Highlights Diagnostics Life Science


Slide 5

FY2020 Third Quarter Earnings Summary ($000’s except Per Share Amounts) Adjusted (Non-GAAP) FY2020 FY2019 Change Revenue $84,797 $48,440 +75% Gross Margin % 65.9% 58.3% +7.6 pts Operating expenses(1) Ratio $25,443 30.0% $19,343 39.9% +32% -9.9 pts Operating income Margin % $30,409 35.9% $8,916 18.4% +241% +17.5 pts Net earnings EPS $24,014 $0.55 $6,960 $0.16 +245% +244% GAAP FY2020 FY2019 Change Operating expenses(2) $21,187 $21,795 -3% Operating income Margin % $34,665 40.9% $6,464 13.3% +436% +27.6 pts Net earnings EPS $27,507 $0.64 $5,079 $0.12 +442% +433% Highlights Record revenues for the Quarter Dx ↓ 35% as expected LS ↑ 312+% Revenue levels yielded higher gross profit margin and lower operating expense ratio Operating expenses reflect higher R&D spending, incremental purchasing accounting amortization, and additional corporate incentive bonus Record earnings and EPS 1) Includes Corporate Segment expenses of $2.7M in 2020 and $1.8M in 2019. 2) Includes favorable adjustment to fair value of GenePOC earnout obligation in the amount of $6.1M in 2020.


Slide 6

FY2020 Third Quarter Operating Segment Highlights ($000’s) Diagnostics (Adjusted Non-GAAP) FY2020 FY2019 Change Revenue $21,598 $33,118 -35% Operating income Margin % ($7,118) NMF $7,103 21.4% NMF NMF Diagnostics revenue by: Technology: Molecular assays $3,182 $5,894 -46% Non-molecular assays 18,416 27,224 -32% Disease State: GI (Gastrointestinal) $9,584 $17,232 -44% RI (Respiratory Illnesses) 5,052 5,708 -11% Blood Chemistry (Lead) 3,364 4,666 -28% Other 3,598 5,512 -35% Life Science (Adjusted Non-GAAP) FY2020 FY2019 Change Revenue $63,199 $15,322 +312% Operating income Margin % $40,250 63.7% $3,639 23.8% +1,006% +39.9 pts Life Science revenue by: Technology: Molecular reagents $38,784 $5,495 +606% Immunological reagents 24,415 9,827 +148% Region: Americas $22,015 $4,369 +404% EMEA 26,070 6,389 +308% ROW 15,114 4,564 +231% China (included in ROW) 9,491 2,741 +246% Product / Customer Highlights: Revenue levels depressed across all products from COVID pandemic Exalenz contributed $1.3M in new revenue LeadCare shipments started to rebound in June Product / Customer Highlights: COVID-related sales of ~$48M ($16M Immuno / $32M Molecular) Shipments to industrial customers represented nearly 90% of total revenues


Slide 7

FY2020 Fiscal Year Guidance Meridian Bioscience Diagnostics Life Science Prior Guidance Updated FY2020 Guidance Meridian Bioscience Consolidated net revenues: $245 to $250 Million Adjusted operating margin: 22% to 23% Adjusted earnings per share*: $1.01 to $1.05 Diagnostics Net revenues: $118 to $120 million Life Science Net revenues: $127 to $130 million Consolidated net revenues: $230 to $236 Million Adjusted operating margin: 18% to 19% Adjusted earnings per share: $0.70 to $0.75 Net revenues: $120 to $122 million Net revenues: $110 to $114 million * Assumes 42.2M diluted share count


Slide 8

EXALENZ


Slide 9

Operational leadership retained and integrated Commercial organization fully integrated with Meridian Executed virtual sales training on BreathID® First BreathID® Smart System placed in fiscal Q3 Exalenz Integration Update


Slide 10

Unparalleled Performance Most accurate test on market with 100% sensitivity Intuitive Efficiency Fully automated process, 2 minutes per test with an intuitive, user-friendly touchscreen for optimal process management Trusted H. pylori Partner Full portfolio suited to physician choice Compact Benchtop Footprint All-in-one technology combines automated features into 1 platform that can fit into labs of any size The BreathID® Smart Advantage


Slide 11

COVID-19


Slide 12

Life Science “Shots on Goal” PCR Antibody Antigen Molecular Immunological Less More TBD More Less TBD Neutral Zero TBD 35+ Approved assays 10+ Approved assays TBD Americas EMEA ROW Americas Jan Feb Mar Apr May Jun Jul New COVID-19 Cases (7 Day Rolling Avg) Source: European Center for Disease Prevention and Control (ECDC) as of August 4, 2020


Slide 13

Contact: mbi@meridianbioscience.com

v3.20.2
Document and Entity Information
Aug. 07, 2020
Cover [Abstract]  
Entity Registrant Name MERIDIAN BIOSCIENCE INC
Amendment Flag false
Entity Central Index Key 0000794172
Document Type 8-K
Document Period End Date Aug. 07, 2020
Entity Incorporation State Country Code OH
Entity File Number 0-14902
Entity Tax Identification Number 31-0888197
Entity Address, Address Line One 3471 River Hills Drive
Entity Address, City or Town Cincinnati
Entity Address, State or Province OH
Entity Address, Postal Zip Code 45244
City Area Code (513)
Local Phone Number 271-3700
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Security 12b Title Common Stock, no par value
Trading Symbol VIVO
Security Exchange Name NASDAQ
Entity Emerging Growth Company false