Meridian Bioscience, Inc. (NASDAQ:VIVO) today announced that based
on preliminary results, it expects revenues for fiscal 2017, ended
on September 30, 2017, to be approximately $200.5 million, an
increase of 2% compared to the prior year. Diluted earnings per
share on a GAAP basis are expected to be $0.50 to $0.51. On a
non-GAAP basis, excluding the third fiscal quarter goodwill
impairment charge of $6.6 million, and fourth fiscal quarter CEO
transition costs and litigation costs associated with protecting
intellectual property of $.5 million after tax, earnings per share
are expected to be $0.66 to $0.67.
The preliminary results reflect fourth quarter
revenue of approximately $49.5 million, representing 5% growth
compared to the prior year. The Diagnostic and the Life Science
Segments reported revenue growth of 3% and 14%, respectively. The
Americas diagnostics business, which consists predominately of the
U.S. market, reported revenue growth of 4%, indicating the efforts
over the last 15 months to strengthen this unit are showing
results. Major core diagnostic product families including Food and
H. pylori posted growth, while other product families are
stabilizing. Our C.difficile business achieved $5 million in
revenues for the quarter, representing the third consecutive
quarter of revenues at or above the $5 million level. Our
illumigene product family experienced its third
consecutive quarter of revenues at $8 million or above. Magellan
revenues were down 7%, primarily as a result of a large
international order that occurred in the prior year. We continued
to see a steady stream of Magellan LeadCare II analyzer placements
during the quarter. Both Life Science Units performed very well.
The Bioline molecular component unit grew 9%, while the immunoassay
component and reagent unit grew 18% in the quarter.
FISCAL 2018 REVENUE AND EARNINGS GUIDANCE
Based on planning and budgeting activities for
fiscal 2018, net revenues for fiscal 2018 are expected to be
between $207 and $212 million, representing growth of 3% to 6%. On
a GAAP basis, per share diluted earnings for fiscal 2018 are
expected to be between $0.59 and $0.62. On a non-GAAP basis, fiscal
2018 earnings are expected to be between $0.65 and $0.68, resulting
in relatively flat earnings compared to fiscal 2017 on a non-GAAP
basis. Non-GAAP adjustments include CEO transition costs and
litigation costs associated with protecting intellectual property.
This guidance also assumes the medical device tax moratorium
continues in calendar 2018.
Our fiscal 2018 guidance reflects a concerted
effort to invest for the future. We are increasing our focus on
investments in research and development; and sales and marketing.
We also expect the resumption of making provisions for incentive
compensation in conjunction with the achievement of operating
objectives. We expect the increased investments in these areas to
drive higher revenue levels in fiscal 2018. Looking ahead to fiscal
2019, we expect that these investments will result in higher levels
of both revenue and earnings growth as new products across all
business units are introduced to the market in late fiscal 2018 and
in 2019.
Per share estimates assume an increase in the
average diluted shares outstanding from approximately 42.6 million
to 42.8 million at fiscal 2018 year end. Revenue and earnings
guidance provided in this press release does not include the impact
of any acquisitions the Company may complete during fiscal
2018.
COMPANY COMMENTS
John A. Kraeutler, Executive Chairman of the
Board, said, “We are pleased with our fourth quarter results and
the positive momentum going into fiscal 2018. Each of our business
units is expected to deliver growth in fiscal 2018, yielding
overall revenue growth of 3% to 6% during fiscal 2018. Within the
Diagnostics segment, the core diagnostic business is expected to
generate low single-digit growth as we stabilize and modestly grow
the C.difficile, foodborne and H.pylori product families. We expect
mid-to-high single-digit growth in our malaria and respiratory
product categories. Our illumigene Group A Strep
and Mycoplasma tests, as well as a new rapid influenza test, are
key growth drivers for the respiratory family.
The Magellan business unit is expected to
deliver high single-digit to low double-digit growth with continued
LeadCare II penetration in pediatric and Ob-Gyn offices, along with
international growth.
Our Meridian Life Science component business is
expected to deliver mid-single-digit growth fueled by its tropical
disease reagent menu and growth in China. Our Bioline molecular
component business is expected to again have mid-to-high
single-digit growth coming from new products such as its lyo
(lyophilized) ready mixes and other real time PCR components.
We have several important new product
development efforts underway that will progress during fiscal 2018,
and which are driving higher levels of research and development
spending. This includes our new Curian diagnostic platform and a
novel combined C.difficile Toxins A/B and GDH test. We expect this
test to launch in late fiscal 2018. We also expect to launch
illumigene CMV, the first molecular test for
cytomegalovirus, late in fiscal 2018. This test will detect the
presence of cytomegalovirus in newborns. This virus can cause
hearing and vision loss and intellectual disability. We expect to
complete development on our H.pylori/Clarithromycin resistance
assay during fiscal 2018 and enter clinical trials in early 2019.
These analyte specific reagents are currently available in our
product catalogue.
Our Magellan business unit is diligently working
to strengthen its quality system and working closely with the FDA.
In parallel, it expects to complete development of a new assay
platform that provides improved lead testing and additional assay
menu for the pediatric and Ob-Gyn physician office market. On the
life science front, our Bioline business has a robust pipeline of
products geared toward components used in next generation
sequencing and real time PCR applications.
These important product development activities
will expand our base of revenue growth drivers well into the
future. By building this broad base of revenue growth drivers in
each of the business units, we believe each unit has the tools to
generate higher levels of revenue growth as we move into the second
half of 2018 and into 2019.
Our financial condition remains strong. Our cash
position and cash flows from operating activities also remain
strong. We plan to recommend to the Board maintaining our dividend
at its current annual indicated rate of $0.50 per share. We
continue to seek acquisition and collaboration opportunities to
expand and diversify our revenue base. We expect that with an
expanded base of revenues from new products, and our proven
financial efficiency, fiscal 2018 will set the stage for a period
of accelerated revenue and earnings growth beginning in fiscal
2019. I am pleased to have Jack Kenny on board as CEO, and I look
forward to his leadership in maximizing the many assets in the
Meridian portfolio and providing leadership in building an even
more robust portfolio in the future.”
Jack Kenny, Chief Executive Officer, said,
“Meridian is entering fiscal 2018 with a sound Plan aimed at
investing for the future. The Company has a 40 year history of
innovation and profitable operations. I look forward to managing
toward Plan during fiscal 2018 and continuing the strategy of
building a broad base of revenue growth drivers as Meridian marches
toward its 50th anniversary.”
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 actual results, financial condition,
or 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 or in
protecting its intellectual property. 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. 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 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, 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 most recent
Annual Report on Form 10-K, and other periodic filings with the
Securities and Exchange Commission contain 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 test kits, rare reagents, specialty biologicals and
components. Utilizing a variety of methods, our diagnostic tests
provide accuracy, simplicity and speed in the early diagnosis and
treatment of common medical conditions, such as infections and lead
poisoning. Meridian’s diagnostic products are used outside of the
human body and require little or no special equipment. The
Company's diagnostic 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, and blood lead
level testing. In addition, Meridian is a supplier of rare
reagents, specialty biologicals and components used by
organizations in the life science and agri-bio industries engaged
in research. Its products are also used by companies as components
in the manufacture of diagnostics. The Company markets its products
and technologies to hospitals, reference laboratories, research
centers, diagnostics manufacturers and agri-bio 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. KraeutlerExecutive Chairman of
the BoardMeridian Bioscience, Inc.Phone: 513.271.3700Email:
mbi@meridianbioscience.com
Jack KennyChief Executive OfficerMeridian Bioscience, Inc.Phone:
513.271.3700Email: mbi@meridianbioscience.com
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