Meridian Bioscience Reports Strong Fourth Quarter and Record Full-Year Fiscal 2020 Operating Results and Provides Fiscal 2021 Guidance
11/13/2020 - 07:30 AM
CINCINNATI, Nov. 13, 2020 (GLOBE NEWSWIRE) -- Meridian Bioscience, Inc. (NASDAQ: VIVO) today announced financial results for the fourth quarter and fiscal year ended September 30, 2020.
Fourth Quarter 2020 Highlights (Comparison to Fourth Quarter Fiscal 2019):
Consolidated Net Revenue of $64.2 million , up 26% year-over-year Life Science segment delivers revenue of $34.4 million , up 97% year-over-year Diagnostics segment revenues decreased 11% year-over-year to $29.8 million , a stronger than expected rebound from Q3 FY20, up 38% quarter-over-quarter Launched various SARS-CoV-2 antibody pairs, designed for highly sensitive rapid antigen tests (for saliva and nasopharyngeal samples) Full Fiscal Year 2020 Highlights (Comparison to Full Year Fiscal 2019):
Consolidated Net Revenue of $253.7 million , up 26% year-over-year Life Science segment delivers record revenue of $132.5 million , up 106% year-over-year, with the contribution of $71.5 million from COVID-19 related products for immunological and molecular tests Diagnostics segment revenues decreased 11% year-over-year to $121.1 million , due to headwinds from COVID-19 pandemic in the second half Launched the Curian® analyzer and HpSA® assay, the first internally developed new product in several years Completed assay design lock of a PCR COVID-19 test on the Revogene® system and preparing submission to the FDA for Emergency Use Authorization Closed the acquisition of Exalenz Bioscience, adding the BreathID® instrument and its Urea Breath Test for H. pylori to the diagnostics product portfolio Fourth Quarter Fiscal 2020 Results (Comparison to Fourth Quarter Fiscal 2019) 26% to $64.2 million , compared to $50.8 million last year. Diagnostics segment revenues rebounded strongly from the pandemic headwinds seen in the third fiscal quarter, but were still down 11% year-over-year. Life Science segment revenues were up 97% . Our Diagnostics segment experienced a 23% decrease in revenues from our molecular products and revenues from our non-molecular assay products decreased 8% . Our Life Science segment revenues for the quarter included $18.1 million in revenue from COVID-19 related products with $14.6 million coming from molecular products and $3.5 million coming from immunological products.
Reported operating income for the fourth quarter of fiscal 2020 was $9.5 million . Operating expenses included: (i) 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 acquisition of Exalenz in April 2020, as well as an upward adjustment in the fair value of the earnout obligation for the acquisition of the GenePOC business in 2019. On an adjusted basis, operating income was $12.0 million , a margin of 19% (see non-GAAP financial measure reconciliation below).
Jack Kenny, Chief Executive Officer, commented, “This was truly a transformative year for Meridian. All our hard work over the previous two years prepared us to both weather the storm in Diagnostics and excel as a critical partner to the IVD industry battling a global pandemic. Heading into fiscal 2021, we will build on the momentum in Diagnostics and continue the strength in Life Science to deliver another record year.”
Full Fiscal Year 2020 Results (Comparison to Full Year Fiscal 2019) 26% to $253.7 million , compared to $201.0 million in fiscal 2019. Diagnostics segment revenues were down 11% , while Life Science segment revenues were up 106% . Our Diagnostics segment experienced a 17% decrease in revenues from our molecular products and revenues from our non-molecular assay products decreased 10% . Our Life Science segment revenues for the fiscal year included $71.5 million in revenue from COVID-19 related products with $52.2 million coming from molecular products and $19.3 million coming from immunological products.
Reported operating income for fiscal 2020 was $61.3 million . Operating expenses included: (i) 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 net downward adjustment in the fair value of the earnout obligation for the acquisition of the GenePOC business. On an adjusted basis, operating income was $61.7 million , a margin of 24% (see non-GAAP financial measure reconciliation below).
Bryan Baldasare, Chief Financial Officer, commented, “Fiscal 2020 marked not only a record year in revenues and earnings, but also cash flows from operations, allowing us to repay borrowings under our revolving credit facility and increase our available credit capacity.”
Fiscal 2021 Guidance $80 and $85 million , albeit, subject to the same quarter-to-quarter volatility that was seen in fiscal 2020. Adjusted operating margin reflects significant investment in R&D and manufacturing, coupled with costs associated with the acquisition of Exalenz and annualization of headcount increases during fiscal 2020. Gross margin is expected to be relatively flat on a consolidated basis, reflecting a modest improvement for Diagnostics driven by higher volumes from rebounding demand, and a modest decline for Life Science driven by investments to fortify capacity for larger scale manufacturing. Diagnostics investment in new product development is forecast to be 18% of Diagnostics revenue as a result of costs for clinical trials delayed from fiscal 2020, which are added to anticipated spend on products advancing through the development pipeline. Life Science is also investing in infrastructure across sales and R&D to support the new scale of the business.
Revenues
Consolidated – $290 t o $310 million Diagnostics segment – $140 t o $150 million Life Science segment – $150 t o $160 million Adjusted Operating Margin
Consolidated – 23.5% to 24.5% Effective Tax Rate
Adjusted Earnings Per Share on a Diluted Basis (based on 44.3M shares)
The higher tax rate compared to 2020 reflects a larger amount of taxable income coming from the United States. Adjusted operating margin and adjusted earnings per share on a diluted basis for fiscal 2021 exclude costs associated with restructuring activities, changes in the fair value of the earnout obligation and selected legal matters that we expect to continue in fiscal 2021. Current customer order patterns for our Life Science segment coupled with the current trends with the pandemic, indicate revenues for the segment could favor the first half of the fiscal year and are incorporated in our guidance. Finally, this guidance reflects our current line of sight and assumes that we do not encounter any significant reductions in manufacturing capacity as a result of the pandemic causing either partial or full site closures for an extended period of time, or adversely affecting our supply chain for raw materials.
Financial Condition $53.5 million and the Company had $91.2 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 $68.8 million as of September 30, 2020.
Conference Call Information www.meridianbioscience.com
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FOURTH QUARTER AND FISCAL 2020 UNAUDITED OPERATING RESULTS
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 2020 and fiscal 2019.
Three Months Ended Twelve Months Ended September 30, September 30, 2020 2019 2020 2019 Net revenues $ 64,153 $ 50,846 $ 253,667 $ 201,014 Cost of sales 25,822 21,664 97,419 82,286 Gross profit 38,331 29,182 156,248 118,728 Operating expenses Research and development 6,983 5,607 23,729 17,760 Selling and marketing 7,210 7,140 26,486 27,995 General and administrative 12,109 8,872 44,345 34,044 Acquisition-related costs 462 363 3,890 1,808 Change in fair value of contingent consideration obligation 1,135 - (6,293 ) - Restructuring costs 67 1,138 687 2,839 Selected legal costs 891 213 2,080 1,583 Total operating expenses 28,857 23,333 94,924 86,029 Operating income 9,474 5,849 61,324 32,699 Other expense, net (1,727 ) (493 ) (2,031 ) (1,142 ) Earnings before income taxes 7,747 5,356 59,293 31,557 Income tax provision 1,254 1,253 13,107 7,175 Net earnings $ 6,493 $ 4,103 $ 46,186 $ 24,382 Net earnings per basic common share $ 0.15 $ 0.10 $ 1.08 $ 0.57 Basic common shares outstanding 42,940 42,711 42,855 42,571 Net earnings per diluted common share $ 0.15 $ 0.10 $ 1.07 $ 0.57 Diluted common shares outstanding 43,642 42,916 43,174 42,899
Three Months Ended Twelve Months Ended September 30, September 30, 2020 2019 2020 2019 Adjusted Financial Measures (see non-GAAP financial measure reconciliation below) Operating income $ 12,029 $ 7,563 $ 61,688 $ 38,929 Net earnings 8,289 5,399 46,301 29,142 Net earnings per diluted common share $ 0.19 $ 0.13 $ 1.07 $ 0.68
Condensed Balance Sheet Data
September 30, 2020 2019 Cash and equivalents $ 53,514 $ 62,397 Working capital 109,666 123,847 Long-term debt 68,824 75,824 Shareholders’ equity 247,629 190,967 Total assets 405,261 325,478
Segment Data
Three Months Ended Twelve Months Ended September 30, September 30, 2020 2019 2020 2019 Diagnostics Molecular assays $ 4,648 $ 6,074 $ 21,907 $ 26,283 Non-molecular assays 25,153
VIVO Rankings
N/A Ranked by Stock Gains
VIVO Stock Data
Industry
Surgical and Medical Instrument Manufacturing
Sector
Manufacturing
Tags
Health Technology, Biotechnology, Manufacturing, Surgical and Medical Instrument Manufacturing
Country
US
City
Cincinnati
About VIVO
Meridian Bioscience Inc. is a fully integrated life science company that develops, manufactures, markets and distributes a broad range of innovative diagnostic products.The company is 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, Meridian provides critical life science raw materials used in immunological and molecular tests for human, animal, plant, and environmental applications. Through diagnosis, Meridian provides diagnostic solutions in areas including gastrointestinal and upper respiratory infections and blood lead level testing. The company builds 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.
