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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Meridian Bioscience Inc | NASDAQ:VIVO | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 33.97 | 33.97 | 34.00 | 0 | 01:00:00 |
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Title of each class
|
Trading
Symbol(s) |
Name of each exchange
on which registered |
||
Common Stock, no par value
|
VIVO
|
NASDAQ Global Select Market
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☒
|
|||
Non-accelerated
filer
|
☐
|
Smaller reporting company
|
☐
|
|||
Emerging growth company
|
☐
|
|
|
Class
|
Outstanding July 31, 2020
|
|
Common Stock, no par value
|
42,862,598
|
|
|
|
|
Page(s)
|
|
|
PART I.
|
|
|
||||
Item 1.
|
|
|
||||
|
|
|
1
|
|
||
|
|
|
2
|
|
||
|
|
|
3
|
|
||
|
|
|
4-5
|
|
||
|
|
|
6
|
|
||
|
|
|
7-22
|
|
||
Item 2.
|
|
|
|
22-31
|
|
|
Item 3.
|
|
|
|
31
|
|
|
Item 4.
|
|
|
|
31
|
|
|
PART II.
|
|
|
||||
Item 1.
|
|
|
|
32
|
|
|
Item 1A.
|
|
|
|
32
|
|
|
Item 6.
|
|
|
|
32
|
|
|
|
|
|
33
|
|
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)
|
|
|
|
|
||||||||||||
Interest income
|
3
|
194
|
137
|
547
|
||||||||||||
Interest expense
|
(703
|
) |
(448
|
) |
(2,002
|
) |
(1,158
|
) | ||||||||
Other, net
|
908
|
268
|
1,561
|
(38
|
) | |||||||||||
Total other income (expense)
|
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
|
||||||||
DILUTED EARNINGS PER COMMON SHARE
|
$ |
0.64
|
$ |
0.12
|
$ |
0.92
|
$ |
0.47
|
||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
-
BASIC
|
42,837
|
42,639
|
42,819
|
42,526
|
||||||||||||
EFFECT OF DILUTIVE STOCK OPTIONS AND RESTRICTED SHARE UNITS
|
436
|
271
|
219
|
381
|
||||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
-
DILUTED
|
43,273
|
42,910
|
43,038
|
42,907
|
||||||||||||
ANTI-DILUTIVE SECURITIES:
|
|
|
|
|
||||||||||||
Common share options and restricted share units
|
854
|
1,215
|
1,298
|
1,073
|
||||||||||||
DIVIDENDS DECLARED PER COMMON SHARE
|
$ |
—
|
$ |
—
|
$ |
—
|
$ |
0.250
|
||||||||
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
||||||||
NET EARNINGS
|
$ |
27,507
|
$ |
5,079
|
$ |
39,693
|
$ |
20,279
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
||||||||||||
Foreign currency translation adjustment
|
597
|
1,692
|
579
|
1,353
|
||||||||||||
Unrealized loss on cash flow hedge
|
(390
|
) |
(297
|
) |
(703
|
) |
(1,184
|
) | ||||||||
Reclassification of gain on cash flow hedge
|
(77
|
) |
—
|
(231
|
) |
—
|
||||||||||
Income taxes related to items of other comprehensive income
|
115
|
222
|
230
|
445
|
||||||||||||
Other comprehensive income (loss), net of tax
|
245
|
1,617
|
(125
|
) |
614
|
|||||||||||
COMPREHENSIVE INCOME
|
$ |
27,752
|
$ |
6,696
|
$ |
39,568
|
$ |
20,893
|
||||||||
Nine Months Ended June 30,
|
2020
|
|
2019
|
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
||||||
Net earnings
|
$ |
39,693
|
$ |
20,279
|
||||
Non-cash
items included in net earnings:
|
|
|
||||||
Depreciation of property, plant and equipment
|
3,762
|
3,984
|
||||||
Amortization of intangible assets
|
5,604
|
2,778
|
||||||
Stock-based compensation
|
2,809
|
2,728
|
||||||
Deferred income taxes
|
2,214
|
(852
|
) | |||||
Loss on disposition and write-down of fixed assets
|
—
|
220
|
||||||
Change in accrued contingent consideration
|
(7,428
|
) |
—
|
|||||
Change in the following, net of acquisitions:
|
|
|
||||||
Accounts receivable
|
(6,352
|
) |
1,014
|
|||||
Inventories
|
(17,828
|
) |
(67
|
) | ||||
Prepaid expenses and other current assets
|
68
|
(1,849
|
) | |||||
Accounts payable and accrued expenses
|
4,422
|
(1,703
|
) | |||||
Income taxes payable
|
3,401
|
1,402
|
||||||
Other, net
|
1,315
|
583
|
||||||
Net cash provided by operating activities
|
31,680
|
28,517
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
||||||
Purchase of property, plant and equipment
|
(2,471
|
) |
(3,314
|
) | ||||
Acquisition of Exalenz
, net of cash acquired
|
(51,299
|
) |
—
|
|||||
Acquisition of GenePOC business
|
—
|
(45,239
|
) | |||||
Net cash used for investing activities
|
(53,770
|
) |
(48,553
|
) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
||||||
Dividends paid
|
—
|
(10,612
|
) | |||||
Payment on revolving credit facility
|
(27,000
|
) |
—
|
|||||
Proceeds from revolving credit facility
|
50,000
|
75,824
|
||||||
Payment of debt issuance costs
|
(116
|
) |
(489
|
) | ||||
Payments on term loan
|
—
|
(50,250
|
) | |||||
Proceeds from exercise of stock options
|
—
|
443
|
||||||
Net cash
p
rovided by
|
22,884
|
14,916
|
||||||
Effect of Exchange Rate Changes on Cash and Equivalents
|
254
|
(451
|
) | |||||
Net Increase (Decrease) in Cash and Equivalents
|
1,048
|
(5,571
|
) | |||||
Cash and Equivalents at Beginning of Period
|
62,397
|
60,763
|
||||||
Cash and Equivalents at End of Period
|
$ |
63,445
|
$ |
55,192
|
||||
|
June 30,
2020 (Unaudited) |
|
September 30,
2019 |
|
||||
CURRENT ASSETS
|
|
|
||||||
Cash and equivalents
|
$ |
63,445
|
$ |
62,397
|
||||
Accounts receivable, less allowances of $527 and $537, respectively
|
42,384
|
35,608
|
||||||
Inventories
|
60,468
|
39,617
|
||||||
Prepaid expenses and other current assets
|
7,909
|
7,139
|
||||||
Total current assets
|
174,206
|
144,761
|
||||||
PROPERTY, PLANT AND EQUIPMENT, at Cost
|
|
|
||||||
Land
|
986
|
982
|
||||||
Buildings and improvements
|
32,132
|
31,904
|
||||||
Machinery, equipment and furniture
|
67,563
|
64,155
|
||||||
Construction in progress
|
1,455
|
522
|
||||||
Subtotal
|
102,136
|
97,563
|
||||||
Less: accumulated depreciation and amortization
|
71,328
|
66,996
|
||||||
Net property, plant and equipment
|
30,808
|
30,567
|
||||||
OTHER ASSETS
|
|
|
||||||
Goodwill
|
118,567
|
89,241
|
||||||
Other intangible assets, net
|
83,363
|
60,243
|
||||||
Right-of-use
assets
|
6,472
|
—
|
||||||
Deferred income taxes
|
5,701
|
156
|
||||||
Other assets
|
670
|
510
|
||||||
Total other assets
|
214,773
|
150,150
|
||||||
TOTAL ASSETS
|
$ |
419,787
|
$ |
325,478
|
||||
|
Common
Shares Issued |
Additional
Paid-In
Capital |
Retained
Earnings |
Accumulated Other
Comprehensive Income (Loss) |
Total
Shareholders’ Equity |
|||||||||||||||
THREE MONTHS ENDED JUNE 30, 2020
Balance at March 31, 2020
|
42,831
|
$ |
134,584
|
$ |
75,294
|
$ |
(5,345)
|
$ |
204,533
|
|||||||||||
Conversion of restricted share units
|
8
|
—
|
—
|
—
|
—
|
|||||||||||||||
Stock compensation expense
|
—
|
1,050
|
—
|
—
|
1,050
|
|||||||||||||||
Net earnings
|
—
|
—
|
27,507
|
—
|
27,507
|
|||||||||||||||
Foreign currency translation adjustment
|
—
|
—
|
—
|
597
|
597
|
|||||||||||||||
Hedging activity, net of tax
|
—
|
—
|
—
|
(352)
|
(352)
|
|||||||||||||||
Balance at June 30, 2020
|
42,839
|
$ |
135,634
|
$ |
102,801
|
$ |
(5,100)
|
$ |
233,335
|
|||||||||||
THREE MONTHS ENDED JUNE 30, 2019
Balance at March 31, 2019
|
42,515
|
$ |
131,951
|
$ |
54,074
|
$ |
(4,380)
|
$ |
181,645
|
|||||||||||
Conversion of restricted share units and exercise of stock options
|
156
|
—
|
—
|
—
|
—
|
|||||||||||||||
Stock compensation expense
|
—
|
360
|
—
|
—
|
360
|
|||||||||||||||
Net earnings
|
—
|
—
|
5,079
|
—
|
5,079
|
|||||||||||||||
Foreign currency translation adjustment
|
—
|
—
|
—
|
1,692
|
1,692
|
|||||||||||||||
Hedging activity, net of tax
|
—
|
—
|
—
|
(223)
|
(223)
|
|||||||||||||||
Adoption of ASU
2018-02
|
—
|
—
|
(148)
|
148
|
—
|
|||||||||||||||
Balance at June 30, 2019
|
42,671
|
$ |
132,311
|
$ |
59,005
|
$ |
(2,763)
|
$ |
188,553
|
|||||||||||
|
Common
Shares Issued |
Additional
Paid-In
Capital |
Retained
Earnings |
Accumulated Other
Comprehensive Income (Loss) |
Total
Shareholders’ Equity |
|||||||||||||||
NINE MONTHS ENDED JUNE 30, 2020
Balance at September 30, 2019
|
42,712
|
$ |
132,834
|
$ |
63,108
|
$ |
(4,975)
|
$ |
190,967
|
|||||||||||
Conversion of restricted share units
|
127
|
(9)
|
—
|
—
|
(9)
|
|||||||||||||||
Stock compensation expense
|
—
|
2,809
|
—
|
—
|
2,809
|
|||||||||||||||
Net earnings
|
—
|
—
|
39,693
|
—
|
39,693
|
|||||||||||||||
Foreign currency translation adjustment
|
—
|
—
|
—
|
579
|
579
|
|||||||||||||||
Hedging activity, net of tax
|
—
|
—
|
—
|
(704)
|
(704)
|
|||||||||||||||
Balance at June 30, 2020
|
42,839
|
$ |
135,634
|
$ |
102,801
|
$ |
(5,100)
|
$ |
233,335
|
|||||||||||
NINE MONTHS ENDED JUNE 30, 2019
Balance at September 30, 2018
|
42,400
|
$ |
129,193
|
$ |
49,602
|
$ |
(3,377)
|
$ |
175,418
|
|||||||||||
Cash dividends paid
-
$0.250 per share
|
—
|
—
|
(10,612)
|
—
|
(10,612)
|
|||||||||||||||
Conversion of restricted share units and exercise of stock options
|
271
|
390
|
—
|
—
|
390
|
|||||||||||||||
Stock compensation expense
|
—
|
2,728
|
—
|
—
|
2,728
|
|||||||||||||||
Net earnings
|
—
|
—
|
20,279
|
—
|
20,279
|
|||||||||||||||
Foreign currency translation adjustment
|
—
|
—
|
—
|
1,353
|
1,353
|
|||||||||||||||
Hedging activity, net of tax
|
—
|
—
|
—
|
(887)
|
(887)
|
|||||||||||||||
Adoption of ASU
2014-09
|
—
|
—
|
(116)
|
—
|
(116)
|
|||||||||||||||
Adoption of ASU
2018-02
|
—
|
—
|
(148)
|
148
|
—
|
|||||||||||||||
Balance at June 30, 2019
|
42,671
|
$ |
132,311
|
$ |
59,005
|
$ |
(2,763)
|
$ |
188,553
|
|||||||||||
1.
|
Basis of Presentation
|
2.
|
Significant Accounting Policies
|
|
Three Months Ended June 30,
|
Nine Months Ended June 30,
|
||||||||||||||||||||||
|
2020
|
|
2019
|
|
Inc (Dec)
|
|
2020
|
|
2019
|
|
Inc (Dec)
|
|
||||||||||||
Diagnostics-
|
|
|
|
|
|
|
||||||||||||||||||
Americas
|
$ |
17,575
|
$ |
27,356
|
(36
|
)% | $ |
72,980
|
$ |
84,042
|
(13
|
)% | ||||||||||||
EMEA
|
3,576
|
5,076
|
(30
|
)% |
16,853
|
17,427
|
(3
|
)% | ||||||||||||||||
ROW
|
447
|
686
|
(35
|
)% |
1,498
|
1,814
|
(17
|
)% | ||||||||||||||||
Total Diagnostics
|
21,598
|
33,118
|
(35
|
)% |
91,331
|
103,283
|
(12
|
)% | ||||||||||||||||
Life Science-
|
|
|
|
|
|
|
||||||||||||||||||
Americas
|
22,015
|
4,369
|
404
|
% |
30,642
|
14,347
|
114
|
% | ||||||||||||||||
EMEA
|
26,070
|
6,389
|
308
|
% |
40,977
|
21,608
|
90
|
% | ||||||||||||||||
ROW
|
15,114
|
4,564
|
231
|
% |
26,564
|
10,930
|
143
|
% | ||||||||||||||||
Total Life Science
|
63,199
|
15,322
|
312
|
% |
98,183
|
46,885
|
109
|
% | ||||||||||||||||
Consolidated
|
$ |
84,797
|
$ |
48,440
|
75
|
% | $ |
189,514
|
$ |
150,168
|
26
|
% | ||||||||||||
|
Three Months Ended June 30,
|
Nine Months Ended June 30,
|
||||||||||||||||||||||
|
2020
|
|
2019
|
|
Inc (Dec)
|
|
2020
|
|
2019
|
|
Inc (Dec)
|
|
||||||||||||
Diagnostics-
|
|
|
|
|
|
|
||||||||||||||||||
Molecular assays
|
$ |
3,182
|
$ |
5,894
|
(46
|
)% | $ |
17,259
|
$ |
20,208
|
(15
|
)% | ||||||||||||
Non
-m
olecular assays
|
18,416
|
27,224
|
(32
|
)% |
74,072
|
83,075
|
(11
|
)
%
|
||||||||||||||||
Total Diagnostics
|
$ |
21,598
|
$ |
33,118
|
(35
|
)% | $ |
91,331
|
$ |
103,283
|
(12
|
)% | ||||||||||||
Life Science-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Molecular reagents
|
$ |
38,784
|
$ |
5,495
|
606
|
% | $ |
55,691
|
$ |
17,495
|
218
|
% | ||||||||||||
Immunological reagents
|
24,415
|
9,827
|
148
|
% |
42,492
|
29,390
|
45
|
% | ||||||||||||||||
Total Life Science
|
$ |
63,199
|
$ |
15,322
|
312
|
% | $ |
98,183
|
$ |
46,885
|
109
|
% | ||||||||||||
|
Three Months Ended June 30,
|
Nine Months Ended June 30,
|
||||||||||||||||||||||
|
2020
|
|
2019
|
|
Inc (Dec)
|
|
2020
|
|
2019
|
|
Inc (Dec)
|
|
||||||||||||
Diagnostics-
|
|
|
|
|
|
|
||||||||||||||||||
Gastrointestinal assays
|
$ |
9,584
|
$ |
17,232
|
(44
|
)% | $ |
39,644
|
$ |
52,024
|
(24
|
)% | ||||||||||||
Respiratory illness assays
|
5,052
|
5,708
|
(11
|
)% |
23,664
|
21,242
|
11
|
% | ||||||||||||||||
Blood chemistry assays
|
3,364
|
4,666
|
(28
|
)
%
|
12,508
|
13,364
|
(6
|
)% | ||||||||||||||||
Other
|
3,598
|
5,512
|
(35
|
)% |
15,515
|
16,653
|
(7
|
)% | ||||||||||||||||
Total Diagnostics
|
$ |
21,598
|
$ |
33,118
|
(35
|
)% | $ |
91,331
|
$ |
103,283
|
(12
|
)% | ||||||||||||
(b)
|
Fair Value Measurements –
|
|
|
|
|
|
Fair Value Measurements Using
Inputs Considered as |
|
||||||||||
|
|
Carrying
Value |
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||
Interest rate swaps (see Note 9) -
|
|
|
|
|
||||||||||||
As of June 30, 2020
|
|
$
|
(703
|
)
|
|
$
|
—
|
|
|
$
|
(703
|
)
|
|
$
|
—
|
|
As of September 30, 2019
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Contingent consideration -
|
|
|
|
|
||||||||||||
As of June 30, 2020
|
|
$
|
(19,774
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(19,774
|
)
|
As of September 30, 2019
|
|
$
|
(27,202
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(27,202
|
)
|
Government grant obligations -
|
|
|
|
|
||||||||||||
As of June 30, 2020
|
|
$
|
(11,173
|
)
|
|
$
|
—
|
|
|
$
|
(11,173
|
)
|
|
$
|
—
|
|
As of September 30, 2019
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(c)
|
Recent Accounting Pronouncements –
|
(d)
|
Reclassifications –
|
3.
|
Business Combinations
|
|
PRELIMINARY
|
|
||
Fair value of assets acquired -
|
|
|||
Cash
|
$ |
5,006
|
||
Accounts receivable
|
637
|
|||
Inventories
|
4,329
|
|||
Other current assets
|
851
|
|||
Property, plant and equipment
|
544
|
|||
Goodwill
|
29,288
|
|||
Other intangible assets (estimated useful life):
|
|
|
|
|
Non-compete agreement (5 years)
|
|
|
120
|
|
Trade name
(10 years)
|
3,540
|
|||
Technology (15 years)
|
5,590
|
|||
Customer relationships
(10 years)
|
19,370
|
|||
Right-of-use assets
|
1,358
|
|||
Deferred tax assets, net
|
5,566
|
|||
|
76,199
|
|||
Fair value of liabilities assumed -
|
|
|||
Accounts payable and accrued expenses (including current portion of lease and government grant obligations)
|
|
|
7,757
|
|
Long-term lease obligations
|
|
|
1,054
|
|
Long-term government grant obligations
|
|
|
10,792
|
|
Other
non-current
liabilities
|
|
|
291
|
|
|
|
|
|
|
|
|
19,894
|
||
|
|
|
|
|
Total consideration paid (including $8,068 to payoff long-term debt)
|
|
$
|
56,305
|
|
|
|
|
|
(i) |
a
|
(ii) |
one
$4,000 installment
and
o
ne $10,000 installment
(originally two $10,000 installments contingent upon the achievement of certain product development milestones if achieved by September 30, 2020
and March 31, 2021, respectively
)
; and
|
|
(iii)
|
up to $50,000 of contingent consideration payable if certain financial performance targets are achieved during the twelve-month period ending September 30, 2022. |
Fair value of assets acquired -
|
|
|||
Accounts receivable
|
$ |
57
|
||
Inventories
|
1,511
|
|||
Other current assets
|
84
|
|||
Property, plant and equipment
|
1,424
|
|||
Goodwill
|
34,582
|
|||
Other intangible assets (estimated useful life):
|
|
|||
License agreement (10 years)
|
5,990
|
|||
Technology (15 years)
|
34,136
|
|||
Government grant (1.33 years)
|
800
|
|||
|
78,584
|
|||
Fair value of liabilities assumed -
|
|
|||
Accounts payable and accrued expenses
|
1,058
|
|||
Total consideration paid (including contingent
C
onsideration originally estimated at $27,202)
|
$ |
77,526
|
||
|
Three Months Ended
June 30, |
Nine Months Ended
June 30, |
||||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
||||||||
Net Revenues
|
$ |
85,083
|
$ |
52,319
|
$ |
196,978
|
$ |
160,887
|
||||||||
Net Earnings
|
$ |
28,189
|
$ |
(9
|
) | $ |
39,376
|
$ |
5,093
|
|
Three Months Ended
|
Nine Months Ended
June 30, |
||||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
||||||||
Adjustments to Net Revenues
|
|
|
|
|
||||||||||||
Exalenz and GenePOC pre-acquisition revenues
|
$ |
286
|
$ |
3,879
|
$ |
7,464
|
$ |
10,719
|
||||||||
Adjustments to Net Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exalenz and GenePOC pre-acquisition net losses
|
$ |
(4,919
|
) | $ |
(3,486
|
) | $ |
(6,398
|
) | $ |
(12,924
|
) | ||||
Pro forma adjustments:
|
|
|
|
|
||||||||||||
Meridian acquisition-related costs
|
1,641
|
—
|
3,428
|
—
|
||||||||||||
Exalenz and GenePOC transaction-related costs
|
4,104
|
—
|
4,550
|
—
|
||||||||||||
Remove net impact of non-continuing personnel, locations or activities
|
(447
|
) |
457
|
(305
|
) |
2,949
|
||||||||||
Incremental depreciation and amortization
|
(224
|
) |
(1,739
|
) |
(2,016
|
) |
(4,787
|
) | ||||||||
Incremental interest costs, net
|
444
|
(599
|
) |
(183
|
) |
(1,346
|
) | |||||||||
Tax effects of pro forma adjustments and recognizing benefit on resulting Exalenz losses
|
83
|
279
|
607
|
922
|
||||||||||||
Total Adjustments to Net Earnings
|
$ |
682
|
$ |
(5,088
|
) | $ |
(317
|
) | $ |
(15,186
|
) | |||||
4.
|
Restructuring
|
|
Employee
Separation and Related Costs |
|
Lease and
Other Contract Termination Fees |
|
Other
|
|
Total
|
|
||||||||
Balance at September 30, 2019
|
$ |
1,010
|
$ |
12
|
$ |
114
|
$ |
1,136
|
||||||||
Restructuring charges
|
575
|
86
|
—
|
661
|
||||||||||||
Reversal of prior period accruals
|
(41
|
) |
—
|
—
|
(41
|
) | ||||||||||
Payments
|
(1,515
|
) |
(98
|
) |
(114
|
) |
(1,727
|
) | ||||||||
Balance at June 30, 2020
|
$ |
29
|
$ |
—
|
$ |
—
|
$ |
29
|
||||||||
5.
|
Cash and Equivalents
|
|
June 30,
2020 |
|
September 30,
2019 |
|
||||
Institutional money market funds
|
$ |
1,016
|
$ |
20,913
|
||||
Cash on hand, unrestricted
|
62,429
|
41,484
|
||||||
Total
|
$ |
63,445
|
$ |
62,397
|
||||
6.
|
Inventories
|
|
June 30,
2020 |
|
September 30,
2019 |
|
||||
Raw materials
|
$ |
10,712
|
$ |
7,455
|
||||
Work-in-process
|
17,515
|
11,504
|
||||||
Finished goods - instruments
|
2,002
|
935
|
||||||
Finished goods - kits and reagents
|
30,239
|
19,723
|
||||||
Total
|
$ |
60,468
|
$ |
39,617
|
||||
7.
|
Leasing Arrangements
|
Three Months
Ended June 30, |
Nine Months
Ended |
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
||||||||||||
Operating cash flows from operating leases
|
$ |
435
|
$ |
—
|
$ |
1,213
|
$ |
—
|
||||||||
June 30,
2020 |
||||
Remainder of 2020
|
$ |
522
|
||
2021
|
2,011
|
|||
2022
|
1,647
|
|||
2023
|
1,179
|
|||
2024
|
928
|
|||
Thereafter
|
916
|
|||
Total lease payments
|
7,203
|
|||
Less amount of lease payment representing interest
|
(489
|
) | ||
Total present value of lease payments
|
$ |
6,714
|
||
September 30,
2019 |
||||
2020
|
$ |
1,528
|
||
2021
|
1,451
|
|||
2022
|
1,293
|
|||
2023
|
967
|
|||
2024
|
712
|
|||
Thereafter
|
616
|
|||
Total
|
$ |
6,567
|
||
8.
|
Intangible Assets
|
June 30, 2020
|
September 30, 2019
|
|||||||||||||||
Gross
Carrying Value |
Accumulated
Amortization |
Gross
Carrying Value |
Accumulated
Amortization |
|||||||||||||
Manufacturing technologies, core products and cell lines
|
$ |
61,782
|
$ |
17,755
|
$ |
56,193
|
$ |
15,096
|
||||||||
Trade names, licenses and patents
|
18,045
|
7,291
|
14,494
|
6,094
|
||||||||||||
Customer lists, customer relationships and supply agreements
|
43,666
|
15,349
|
24,274
|
14,110
|
||||||||||||
Government grants
|
794
|
645
|
814
|
232
|
||||||||||||
Non-compete
agreements
|
120 | 4 | — | — | ||||||||||||
Total
|
$ |
|
$ |
41,044
|
$ |
95,775
|
$ |
35,532
|
||||||||
9.
|
Bank Credit Arrangements
|
10.
|
Reportable Segments and Major Customers Information
|
|
Diagnostics
|
|
Life Science
|
|
Corporate
(1)
|
|
Eliminations
(2)
|
|
Total
|
|
||||||||||
Three Months Ended June 30, 2020
|
||||||||||||||||||||
Net revenues -
|
|
|
|
|
|
|||||||||||||||
Third-party
|
$ |
21,598
|
$ |
63,199
|
$ |
—
|
$ |
—
|
$ |
84,797
|
||||||||||
Inter-segment
|
86
|
56
|
—
|
(142
|
) |
—
|
||||||||||||||
Operating income
|
(2,731
|
) |
40,253
|
(2,849
|
) |
(8
|
) |
34,665
|
||||||||||||
Goodwill (June 30, 2020)
|
99,652
|
18,915
|
—
|
—
|
118,567
|
|||||||||||||||
Other intangible assets, net (June 30, 2020)
|
83,304
|
59
|
—
|
—
|
83,363
|
|||||||||||||||
Total assets (June 30, 2020)
|
303,439
|
116,353
|
—
|
(5
|
) |
419,787
|
||||||||||||||
Three Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net revenues -
|
|
|
|
|
|
|||||||||||||||
Third-party
|
$ |
33,118
|
$ |
15,322
|
$ |
—
|
$ |
—
|
$ |
48,440
|
||||||||||
Inter-segment
|
146
|
44
|
—
|
(190
|
) |
—
|
||||||||||||||
Operating income
|
5,731
|
3,639
|
(2,929
|
) |
23
|
6,464
|
||||||||||||||
Goodwill (September 30, 2019)
|
70,395
|
18,846
|
—
|
—
|
89,241
|
|||||||||||||||
Other intangible assets, net (September 30, 2019)
|
59,807
|
436
|
—
|
—
|
60,243
|
|||||||||||||||
Total assets (September 30, 2019)
|
255,169
|
70,392
|
—
|
(83
|
) |
325,478
|
||||||||||||||
Nine Months Ended June 30, 2020
|
||||||||||||||||||||
Net revenues -
|
|
|
|
|
|
|||||||||||||||
Third-party
|
$ |
91,331
|
$ |
98,183
|
$ |
—
|
$ |
—
|
$ |
189,514
|
||||||||||
Inter-segment
|
264
|
176
|
—
|
(440
|
) |
—
|
||||||||||||||
Operating income
|
6,469
|
53,182
|
(7,832
|
) |
31
|
51,850
|
||||||||||||||
Nine Months Ended June 30, 2019
|
||||||||||||||||||||
Net revenues -
|
|
|
|
|
|
|||||||||||||||
Third-party
|
$ |
103,283
|
$ |
46,885
|
$ |
—
|
$ |
—
|
$ |
150,168
|
||||||||||
Inter-segment
|
398
|
273
|
—
|
(671
|
) |
—
|
||||||||||||||
Operating income
|
22,330
|
12,906
|
(8,450
|
) |
64
|
26,850
|
||||||||||||||
(1)
|
Includes Restructuring Costs and Selected Legal Costs of $134 and $1,080 in the three months ended June 30, 2020 and 2019, respectively, and $1,189 and $2,272 in the nine months ended June 30, 2020 and 2019, respectively. |
(2)
|
Eliminations consist of inter-segment transactions. |
Three Months
Ended June 30,
|
Nine Months
Ended June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Segment operating income
|
$ |
37,514
|
$ |
9,393
|
$ |
59,682
|
$ |
35,300
|
||||||||
Corporate operating expenses
|
(2,849
|
) |
(2,929
|
) |
(7,832
|
) |
(8,450
|
) | ||||||||
Interest income
|
3
|
194
|
137
|
547
|
||||||||||||
Interest expense
|
(703
|
) |
(448
|
) |
(2,002
|
) |
(1,158
|
) | ||||||||
Other, net
|
908
|
268
|
1,561
|
(38
|
) | |||||||||||
Consolidated earnings before income taxes
|
$ |
34,873
|
$ |
6,478
|
$ |
51,546
|
$ |
26,201
|
||||||||
11.
|
Litigation Matters
|
12.
|
Subsequent Event
|
(i) |
significantly higher revenue in the Life Science operating segment, due to supplying key molecular components and recombinant antigens to diagnostic test manufacturers for use in
COVID-19
related PCR and antibody tests;
|
(ii) |
higher research and development spending in the Diagnostics segment ($2,337 QTD; $5,068 YTD) under new product development programs;
|
(iii) |
increased cash-based incentive compensation ($2,327 QTD; $4,897 YTD) tied to higher revenue and profit levels;
|
(iv) |
increased intangible asset amortization, primarily resulting from purchase accounting amortization related to the acquisitions of Exalenz and the GenePOC business in April 2020 and June 2019, respectively ($996 QTD; $2,711 YTD);
|
(v) |
increased acquisition-related costs in connection with the fiscal 2020 Exalenz transaction, as compared to those related to the GenePOC transaction in fiscal 2019 ($1,168 QTD; $1,983 YTD);
|
(vi) |
a decrease in the fair value of the earnout obligation for the acquisition of the GenePOC business ($6,124 QTD; $7,428 YTD); and
|
(vii) |
higher gains related to foreign currency ($1,042 QTD; $399 YTD), with both periods including an $845 gain realized from the execution of forward currency contracts in connection with the Exalenz acquisition (see Note 3 of the accompanying Condensed Consolidated Financial Statements).
|
- |
By Reportable Segment & Geographic Region
|
- |
By Product Platform/Type
|
Three Months Ended June 30,
|
Nine Months Ended June 30,
|
|||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||
Gross Profit
|
$ | 55,852 | $ | 28,259 | 98 | % | $ | 117,746 | $ | 89,169 | 32 | % | ||||||||||||
Gross Profit Margin
|
66 | % | 58 | % | 8 points | 62 | % | 59 | % | 3 points |
Three Months Ended June 30,
|
||||||||||||||||||||
Research &
Development |
Selling &
Marketing |
General &
Administrative |
Other
|
Total Operating
Expenses |
||||||||||||||||
Fiscal 2019:
|
||||||||||||||||||||
Diagnostics
|
$ | 3,855 | $ | 5,525 | $ | 3,830 | $ | 1,372 | $ | 14,582 | ||||||||||
Life Science
|
739 | 1,222 | 2,323 | — | 4,284 | |||||||||||||||
Corporate
|
— | — | 1,849 | 1,080 | 2,929 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Expenses (2019 Quarter)
|
$ |
|
$ | 6,747 | $ | 8,002 | $ | 2,452 | $ | 21,795 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fiscal 2020:
|
||||||||||||||||||||
Diagnostics
|
$ | 6,192 | $ | 4,996 | $ | 7,055 | $ | (4,387 | ) | $ | 13,856 | |||||||||
Life Science
|
551 | 1,265 | 2,669 | (3 | ) | 4,482 | ||||||||||||||
Corporate
|
— | — | 2,715 | 134 | 2,849 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Expenses (2020 Quarter)
|
$ |
|
$ | 6,261 | $ | 12,439 | $ | (4,256 | ) | $ | 21,187 | |||||||||
|
|
|
|
|
|
|
|
|
|
Nine Months Ended June 30,
|
||||||||||||||||||||
Research &
Development |
Selling &
Marketing |
General &
Administrative |
Other
|
Total Operating
Expenses |
||||||||||||||||
Fiscal 2019:
|
||||||||||||||||||||
Diagnostics
|
$ | 10,141 | $ | 17,048 | $ | 11,632 | $ | 2,219 | $ | 41,040 | ||||||||||
Life Science
|
2,153 | 4,173 | 6,478 | 25 | 12,829 | |||||||||||||||
Corporate
|
— | — | 6,178 | 2,272 | 8,450 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Expenses (2019
Year-to-Date)
|
$ |
|
$ | 21,221 | $ | 24,288 | $ | 4,516 | $ | 62,319 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fiscal 2020:
|
||||||||||||||||||||
Diagnostics
|
$ | 15,209 | $ | 15,709 | $ | 17,946 | $ | (3,575 | ) | $ | 45,289 | |||||||||
Life Science
|
1,744 | 3,750 | 7,086 | 195 | 12,775 | |||||||||||||||
Corporate
|
— | — | 6,643 | 1,189 | 7,832 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Expenses (2020
Year-to-Date)
|
$ |
|
$ | 19,459 | $ | 31,675 | $ | (2,191 | ) | $ | 65,896 | |||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
||||||||||||||||||||
Research &
Development |
Selling &
Marketing |
General &
Administrative |
Other
|
Total Operating
Expenses |
||||||||||||||||
2019 Expenses
|
$ |
|
$ | 6,747 | $ | 8,002 | $ | 2,452 | $ | 21,795 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
% of Revenues
|
9 | % | 14 | % | 17 | % | 5 | % | 45 | % | ||||||||||
Fiscal 2020 Increases/(Decreases):
|
|
|||||||||||||||||||
Diagnostics
|
2,337 | (529 | ) | 3,225 | (5,759 | ) | (726 | ) | ||||||||||||
Life Science
|
(188 | ) | 43 | 346 | (3 | ) | 198 | |||||||||||||
Corporate
|
— | — | 866 | (946 | ) | (80 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
2020 Expenses
|
$ |
|
$ | 6,261 | $ | 12,439 | $ | (4,256 | ) | $ | 21,187 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
% of Revenues
|
8 | % | 7 | % | 15 | % | (5 | )% | 25 | % | ||||||||||
% Increase (Decrease)
|
47 | % | (7 | )% | 55 | % | (274 | ) % | (3 | ) % |
Nine Months Ended June 30,
|
||||||||||||||||||||
Research &
Development |
Selling &
Marketing |
General &
Administrative |
Other
|
Total Operating
Expenses |
||||||||||||||||
2019 Expenses
|
$ |
|
$ | 21,221 | $ | 24,288 | $ | 4,516 | $ | 62,319 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
% of Revenues
|
8 | % | 14 | % | 16 | % | 3 | % | 41 | % | ||||||||||
Fiscal 2020 Increases/(Decreases):
|
|
|||||||||||||||||||
Diagnostics
|
5,068 | (1,339 | ) | 6,314 | (5,794 | ) | 4,249 | |||||||||||||
Life Science
|
(409 | ) | (423 | ) | 608 | 170 | (54 | ) | ||||||||||||
Corporate
|
— | — | 465 | (1,083 | ) | (618 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
2020 Expenses
|
$ |
|
$ | 19,459 | $ | 31,675 | (2,191 | ) | $ | 65,896 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
% of Revenues
|
9 | % | 10 | % | 17 | % | (1 | )% | 35 | % | ||||||||||
% Increase (Decrease)
|
38 | % | (8 | ) % | 30 | % | (149 | )% | 6 | % |
• |
Increased Research & Development costs, primarily for the development of the Revogene system GI and RI panel assays for the Diagnostics operating segment;
|
• |
Decreased Selling & Marketing costs, primarily reflecting the effects of travel and assembly restrictions imposed during the
COVID-19
pandemic and the effect such restrictions have had on general sales and marketing activities;
|
• |
Increased General & Administrative costs, primarily reflecting additional investment in incentive compensation, along with the purchase accounting amortization from the acquisitions of Exalenz and the GenePOC business; and
|
• |
Increased acquisition and restructuring costs, along with a decrease in fair value of the contingent consideration obligation for the GenePOC business, all of which are reflected within “Other” in the above tables.
|
31.1 | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a) | |
31.2 | Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a) | |
32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | Inline XBRL Instance Document | |
101.SCH | Inline XBRL Instance Extension Schema | |
101.CAL | Inline XBRL Instance Extension Calculation Linkbase | |
101.DEF | Inline XBRL Instance Extension Definition Linkbase | |
101.LAB | Inline XBRL Instance Extension Label Linkbase | |
101.PRE | Inline XBRL Instance Extension Presentation Linkbase | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
MERIDIAN BIOSCIENCE, INC.
|
||||||
Date:
August 7, 2020
|
By: |
/s/ Bryan T. Baldasare
|
||||
Bryan T. Baldasare | ||||||
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
1 Year Meridian Bioscience Chart |
1 Month Meridian Bioscience Chart |
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