Meridian Bioscience, Inc. (NASDAQ:VIVO) today announced that based
on preliminary results, it expects revenues for fiscal year 2016,
ended on September 30, 2016, to be approximately $196 million, an
increase of 1% compared to the prior year. Diluted earnings per
share are expected to be $0.75 to $0.76, including costs related to
acquisition activity and costs associated with the reorganization
of Diagnostics sales and marketing leadership (in the aggregate,
$1.7 million after tax or $0.04 diluted earnings per share). This
compares to diluted earnings per share of $0.85 in fiscal 2015.
These preliminary results reflect fourth quarter
revenues of approximately $47 million. Our fourth quarter revenues
reflect a combination of ongoing competitive pressures during the
quarter within the C. difficile and food product families,
distributor order patterns, and the timing of respiratory season
stocking orders within the core diagnostics business. Despite these
negative factors, we experienced continued growth in our H. pylori
product family and benefited from the addition of revenues from our
March 2016 acquisition of Magellan Diagnostics. Life Science
revenues were flat for the quarter due to a large immunoassay
component order that was shipped in the third quarter versus the
fourth quarter at the customer’s request. The resulting
revenue shortfalls produce the shortfall in earnings compared to
guidance. Our recent acquisition of Magellan has gone well.
Magellan performed above revenue expectations and is expected to be
a penny dilutive to earnings per share for the six months since the
acquisition, also better than expected.
FISCAL 2017 REVENUE AND EARNINGS GUIDANCE
Based on planning and budgeting activities for
fiscal 2017, incorporating the recent Magellan acquisition and new
Diagnostics sales and marketing leadership, net revenues for fiscal
2017 are expected to be $205 million to $210 million, representing
growth of 5% to 7%. Per share diluted earnings for fiscal 2017 are
expected to be between $0.81 and $0.85, representing 1% to 8%
growth, excluding costs associated with acquisition activities and
the reorganization of sales and marketing leadership in 2016. The
per share estimates assume an increase in average diluted shares
outstanding from approximately 42.4 million at fiscal 2016 year end
to approximately 42.6 million at fiscal 2017 year end. The
revenue and earnings guidance provided in this press release does
not include the impact of any acquisitions the Company may complete
during fiscal 2017.
COMPANY COMMENTS
John A. Kraeutler, Chief Executive Officer and
Chairman of the Board said, "For the past several years, as we have
been making investments to drive growth in the future, we have
experienced weakness in certain areas of our business that have
limited our growth. We believe the fundamental changes
initiated over recent months, namely changes in key leadership,
aggressive M&A efforts and global expansion, are already having
a positive effect, and with our broad portfolio of product
opportunities, we are guiding to mid-single digit revenue growth
expectations for fiscal 2017.
"Core diagnostics revenue growth in fiscal 2017
is anticipated to come from continued emphasis on our broad menu,
best value illumigene® molecular platform. The
illumigene system now includes ten tests and
larger growth opportunities are expected to come from our Group A
Strep, Mycoplasma Direct, Pertussis, HSV and Malaria tests.
Testing for C. difficile and Group B Strep will continue to be
highly competitive; however, we expect to maintain our current
levels of revenues. In addition to mid-single digit
illumigene growth, we are expecting low
single-digit growth in our H. pylori product line, including
several newly introduced tests. With new leadership focus, we
anticipate growth in most of our international markets.
Weakness in the foodborne products is expected to continue, but
moderate, and slightly declining sales in this product family are
considered in our guidance.
"Magellan Diagnostics, acquired in March of 2016
and included in our Diagnostics Segment, has exceeded expectations
thus far. For fiscal 2017, we are expecting low double-digit
revenue growth on a normalized annual basis from continued success
in placing the LeadCare II platform in the domestic market.
Expansion into international markets, including China following the
recent CDFA approval of LeadCare II, is expected to contribute to
revenues and may generate revenue upside. Capitalizing on the
increased awareness of lead poisoning, we also expect to begin
selling into OB/GYN offices.
"Life Science segment revenue is expected to
grow at a mid-single-digit rate driven by continued success with
our expansion into China where we see strong interest in our
high-value biological raw materials, and by a rebound in our
Bioline molecular product sales led by products such as JetSeq™,
MyTaq™ Plant and others. Importantly, in order to increase
focus and capacity for higher growth Life Science products, we have
made a strategic decision to exit our biopharma enabling services
which has represented $2 to $3 million in revenue annually, but has
lower profit margins and very limited growth potential.
"Finally, our entire team recognizes that fiscal
2017 has to demonstrate that Meridian is moving and growing again.
We believe the opportunities we have been building will provide
that positive inflection that increases shareholder value.
"Our financial condition remains strong and we
continue to be one of the most financially efficient companies in
our space, generating strong returns on invested capital. Our cash
position and cash flows from operating activities remain strong. We
plan to recommend to the Board maintaining our dividend at its
current annual indicated rate of $0.80 per share. We continue to
seek acquisition and collaboration opportunities to expand and
extend our core capabilities to attractive markets that have demand
for high quality diagnostics and components."
FORWARD-LOOKING STATEMENTSThe
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. 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 and revenue,
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 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, and its ability to effectively
sell such products. 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 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 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, 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 and natural disasters and other events could
have a materially adverse effect on Meridian’s results of
operations and revenues. 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.
About Meridian Bioscience, Inc.
Meridian is a fully integrated life science company that develops,
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 and blood lead levels. 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 health care.
Meridian has strong market positions in the areas of
gastrointestinal and upper respiratory infections; serology,
parasitology and fungal disease diagnosis, and blood lead level
testing. 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, diagnostics
manufacturers and biotech companies in more than 70 countries
around the world. The Company’s shares are traded on the NASDAQ
Global Select Market, symbol VIVO. Meridian's website address is
www.meridianbioscience.com.
Contact:
John A. Kraeutler
Chairman, Chief Executive Officer
Meridian Bioscience, Inc.
Phone: 513.271.3700
Email: mbi@meridianbioscience.com
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