þ | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
Class | Outstanding April 30, 2011 | |
Common Stock, no par value | 41,003,719 |
Three Months Ended | Six Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
NET SALES |
$ | 41,059 | $ | 31,147 | $ | 78,322 | $ | 73,604 | ||||||||
COST OF SALES |
14,803 | 11,006 | 28,518 | 28,019 | ||||||||||||
GROSS PROFIT |
26,256 | 20,141 | 49,804 | 45,585 | ||||||||||||
OPERATING EXPENSES |
||||||||||||||||
Research and development |
2,359 | 2,337 | 4,726 | 4,448 | ||||||||||||
Selling and marketing |
6,060 | 4,356 | 11,862 | 9,298 | ||||||||||||
General and administrative |
5,635 | 4,323 | 11,924 | 8,958 | ||||||||||||
European and global sales &
marketing leadership
reorganization |
1,240 | | 1,240 | | ||||||||||||
Total operating expenses |
15,294 | 11,016 | 29,752 | 22,704 | ||||||||||||
OPERATING INCOME |
10,962 | 9,125 | 20,052 | 22,881 | ||||||||||||
OTHER INCOME (EXPENSE) |
||||||||||||||||
Interest income |
27 | 30 | 44 | 61 | ||||||||||||
Other, net |
118 | 110 | 321 | (8 | ) | |||||||||||
Total other income (expense) |
145 | 140 | 365 | 53 | ||||||||||||
EARNINGS BEFORE INCOME TAXES |
11,107 | 9,265 | 20,417 | 22,934 | ||||||||||||
INCOME TAX PROVISION |
3,847 | 3,285 | 7,132 | 8,033 | ||||||||||||
NET EARNINGS |
$ | 7,260 | $ | 5,980 | $ | 13,285 | $ | 14,901 | ||||||||
BASIC EARNINGS PER COMMON SHARE |
$ | 0.18 | $ | 0.15 | $ | 0.33 | $ | 0.37 | ||||||||
DILUTED EARNINGS PER COMMON SHARE |
$ | 0.18 | $ | 0.15 | $ | 0.32 | $ | 0.36 | ||||||||
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING BASIC |
40,686 | 40,514 | 40,647 | 40,504 | ||||||||||||
EFFECT OF DILUTIVE STOCK OPTIONS |
662 | 663 | 672 | 674 | ||||||||||||
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING DILUTED |
41,348 | 41,177 | 41,319 | 41,178 | ||||||||||||
ANTI-DILUTIVE SECURITIES: |
||||||||||||||||
Common share options |
211 | 215 | 176 | 193 | ||||||||||||
DIVIDENDS DECLARED PER COMMON SHARE |
$ | 0.19 | $ | 0.19 | $ | 0.38 | $ | 0.36 | ||||||||
Page 1
Six Months Ended March 31, | 2011 | 2010 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net earnings |
$ | 13,285 | $ | 14,901 | ||||
Non-cash items: |
||||||||
Depreciation of property, plant and equipment |
1,711 | 1,530 | ||||||
Amortization of intangible assets |
1,226 | 734 | ||||||
Stock-based compensation |
1,324 | 921 | ||||||
Deferred income taxes |
(1,320 | ) | (1,135 | ) | ||||
Loss on disposition of fixed assets |
6 | 13 | ||||||
Unrealized loss on auction-rate securities and rights, net |
| 12 | ||||||
Change in current assets |
(7,128 | ) | 2,944 | |||||
Change in current liabilities |
2,309 | (3,853 | ) | |||||
Other, net |
(1,072 | ) | 560 | |||||
Net cash provided by operating activities |
10,341 | 16,627 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Purchases of property, plant and equipment |
(5,260 | ) | (2,124 | ) | ||||
Purchases of intangibles and other assets |
(12 | ) | | |||||
Purchases of short-term investments |
| (1,000 | ) | |||||
Net cash used for investing activities |
(5,272 | ) | (3,124 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Dividends paid |
(15,451 | ) | (14,580 | ) | ||||
Proceeds and tax benefits from exercises of stock options |
829 | 522 | ||||||
Net cash used for financing activities |
(14,622 | ) | (14,058 | ) | ||||
Effect of Exchange Rate Changes on Cash and Equivalents |
53 | (681 | ) | |||||
Net Decrease in Cash and Equivalents |
(9,500 | ) | (1,236 | ) | ||||
Cash and Equivalents at Beginning of Period |
37,879 | 54,030 | ||||||
Cash and Equivalents at End of Period |
$ | 28,379 | $ | 52,794 | ||||
Page 2
March 31, | September 30, | |||||||
2011 | 2010 | |||||||
CURRENT ASSETS |
||||||||
Cash and equivalents |
$ | 28,379 | $ | 37,879 | ||||
Accounts receivable, less allowances of $169 and $241 |
25,398 | 22,064 | ||||||
Inventories |
32,244 | 28,420 | ||||||
Prepaid expenses and other current assets |
5,506 | 5,071 | ||||||
Deferred income taxes |
2,296 | 1,871 | ||||||
Total current assets |
93,823 | 95,305 | ||||||
PROPERTY, PLANT AND EQUIPMENT, at Cost |
||||||||
Land |
1,190 | 991 | ||||||
Buildings and improvements |
20,924 | 20,670 | ||||||
Machinery, equipment and furniture |
33,124 | 31,945 | ||||||
Construction in progress |
4,644 | 1,320 | ||||||
Subtotal |
59,882 | 54,926 | ||||||
Less: accumulated depreciation and amortization |
35,072 | 33,689 | ||||||
Net property, plant and equipment |
24,810 | 21,237 | ||||||
OTHER ASSETS |
||||||||
Goodwill |
23,525 | 23,376 | ||||||
Other intangible assets, net |
12,213 | 13,327 | ||||||
Restricted cash |
1,000 | 1,000 | ||||||
Other assets |
1,800 | 470 | ||||||
Total other assets |
38,538 | 38,173 | ||||||
TOTAL ASSETS |
$ | 157,171 | $ | 154,715 | ||||
Page 3
March 31, | September 30, | |||||||
2011 | 2010 | |||||||
CURRENT LIABILITIES |
||||||||
Accounts payable |
$ | 5,676 | $ | 4,466 | ||||
Accrued employee compensation costs |
4,313 | 3,451 | ||||||
Other accrued expenses |
5,726 | 5,521 | ||||||
Income taxes payable |
1,252 | 1,160 | ||||||
Total current liabilities |
16,967 | 14,598 | ||||||
DEFERRED INCOME TAXES |
2,614 | 2,756 | ||||||
COMMITMENTS AND CONTINGENCIES |
||||||||
SHAREHOLDERS EQUITY |
||||||||
Preferred stock, no par value, 1,000,000
shares authorized, none issued |
| | ||||||
Common shares, no par value, 71,000,000
shares authorized, 40,953,194 and
40,654,286 shares issued, respectively |
| | ||||||
Additional paid-in capital |
96,360 | 94,529 | ||||||
Retained earnings |
40,011 | 42,177 | ||||||
Accumulated other comprehensive income |
1,219 | 655 | ||||||
Total shareholders equity |
137,590 | 137,361 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |
$ | 157,171 | $ | 154,715 | ||||
Page 4
Accumulated | ||||||||||||||||||||||||
Common | Additional | Other | Total | |||||||||||||||||||||
Shares | Paid-In | Retained | Comprehensive | Comprehensive | Shareholders | |||||||||||||||||||
Issued | Capital | Earnings | Income (Loss) | Income (Loss) | Equity | |||||||||||||||||||
Balance at September 30, 2010 |
40,654 | $ | 94,529 | $ | 42,177 | $ | 655 | $ | 137,361 | |||||||||||||||
Cash dividends paid |
| | (15,451 | ) | | (15,451 | ) | |||||||||||||||||
Exercise of stock options |
132 | 616 | | | 616 | |||||||||||||||||||
Issuance of restricted shares |
167 | | | | | |||||||||||||||||||
Stock compensation expense |
| 1,215 | | | 1,215 | |||||||||||||||||||
Comprehensive income: |
||||||||||||||||||||||||
Net earnings |
| | 13,285 | | $ | 13,285 | 13,285 | |||||||||||||||||
Foreign currency translation adjustment |
| | | 868 | 868 | 868 | ||||||||||||||||||
Other comprehensive income taxes |
| | | (304 | ) | (304 | ) | (304 | ) | |||||||||||||||
Comprehensive income |
$ | 13,849 | ||||||||||||||||||||||
Balance at March 31, 2011 |
40,953 | $ | 96,360 | $ | 40,011 | $ | 1,219 | $ | 137,590 | |||||||||||||||
Page 5
(a) | Revenue Recognition and Accounts Receivable |
Revenue is generally recognized from sales when product is shipped and title has passed to
the buyer. Revenue for the U.S. Diagnostics operating segment is reduced at the date of
sale for estimated rebates that will be claimed by customers. Management estimates accruals
for rebate agreements based on historical statistics, current trends, and other factors.
Changes to the accruals are recorded in the period that they become known. Our rebate
accruals were $5,001 at March 31, 2011 and $5,273 at September 30, 2010. |
Revenue for our Diagnostics operating segments includes bundled product revenue for our
illumigene® molecular test system. The bundled product includes a reader
instrument, instrument accessories, and test kits. In many instances, amounts invoiced for
the illumigene® test kits cover the reader instrument, accessories, and test
kits. Revenue is recognized upon shipment of the individual components of the bundled
product in accordance with pricing agreements. Costs for the reader are recognized in
earnings over the period that we have a pricing agreement in effect with the customer,
generally three years. |
Life Science revenue for contract services may come from research and development services
or manufacturing services, including process development work, or a combination of both.
Revenue is recognized based on each of the deliverables in a given arrangement having
distinct and separate customer pricing. Pricing is often subject to a competitive bidding
process. Contract research and development services may be performed on a time and
materials basis or fixed fee basis. For time and materials arrangements, revenue is
recognized as services are performed and billed. For fixed fee arrangements, revenue is
recognized upon completion and acceptance by the customer. For contract manufacturing
services, revenue is generally recognized upon delivery of product and acceptance by the
customer. In some cases, customers may request that we store on their behalf clinical grade
biologicals that we produce under contract manufacturing agreements. These cases arise when
customers do not have clinical grade storage facilities or do not want to risk contamination
during transport. For such cases, revenue may be recognized on a bill-and-hold basis. |
Trade accounts receivable are recorded in the accompanying Condensed Consolidated Balance
Sheets at invoiced amounts less provisions for rebates and doubtful accounts. The allowance
for doubtful accounts represents our estimate of probable credit losses and is based on
historical write-off experience. The allowance for doubtful accounts and related metrics,
such as days sales outstanding, are reviewed monthly. Accounts with past due balances over
90 days are reviewed individually for collectibility. Customer invoices are charged off
against the allowance when we believe it is probable that the invoices will not be paid. |
Page 6
(b) | Comprehensive Income (Loss) |
Our comprehensive income or loss is comprised of net earnings, foreign currency translation
and the related income tax effects. |
Assets and liabilities of foreign operations are translated using period-end exchange rates
with gains or losses resulting from translation included as a separate component of
comprehensive income or loss. Revenues and expenses are translated using exchange rates
prevailing during the period. We also recognize foreign currency transaction gains and
losses on certain assets and liabilities that are denominated in the Australian dollar,
British pound and Euro currencies. These gains and losses are included in other income and
expense in the accompanying Condensed Consolidated Statements of Operations. |
Three Months | Six Months | |||||||||||||||
Ended March 31, | Ended March 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net earnings |
$ | 7,260 | $ | 5,980 | $ | 13,285 | $ | 14,901 | ||||||||
Foreign currency translation adjustment |
1,804 | (885 | ) | 868 | (1,142 | ) | ||||||||||
Income taxes |
(629 | ) | 310 | (304 | ) | 399 | ||||||||||
Comprehensive income |
$ | 8,435 | $ | 5,405 | $ | 13,849 | $ | 14,158 | ||||||||
(c) | Income Taxes |
The provision for income taxes includes federal, foreign, state and local income taxes
currently payable and those deferred because of temporary differences between income for
financial reporting and income for tax purposes. We prepare estimates of permanent and
temporary differences between income for financial reporting purposes and income for tax
purposes. These differences are adjusted to actual upon filing of our tax returns,
typically occurring in the third and fourth quarters of the current fiscal year for the
preceding fiscal years estimates. |
We account for uncertain tax positions using a benefit recognition model with a two-step
approach: (i) a more-likely-than-not recognition criterion; and (ii) a measurement attribute
that measures the position as the largest amount of tax benefit that is greater than 50%
likely of being realized upon ultimate settlement. If it is not more likely than not that
the benefit will be sustained on its technical merits, no benefit is recorded. We recognize
accrued interest and penalties related to unrecognized tax benefits as a portion of our
income tax provision in the Condensed Consolidated Statements of Operations. |
(d) | Stock-based Compensation |
We recognize compensation expense for all stock-based awards made to employees, based upon
the fair value of the stock-based award on the date of the grant. Shares are expensed over
their requisite service period. |
Page 7
(e) | Cash, Cash Equivalents and Investments |
Our investment portfolio includes the following components: |
March 31, 2011 | September 30, 2010 | |||||||||||||||
Cash and | Cash and | |||||||||||||||
Equivalents | Other | Equivalents | Other | |||||||||||||
Taxable investments - |
||||||||||||||||
Overnight repurchase agreements |
$ | 2,949 | $ | | $ | 14,862 | $ | | ||||||||
Money market funds |
10,258 | | 10,249 | | ||||||||||||
Cash on hand - |
||||||||||||||||
Restricted |
| 1,000 | | 1,000 | ||||||||||||
Unrestricted |
15,172 | | 12,768 | | ||||||||||||
Total |
$ | 28,379 | $ | 1,000 | $ | 37,879 | $ | 1,000 | ||||||||
(f) | Reclassifications |
Certain reclassifications have been made to the prior period financial statements to conform
to the current fiscal period presentation. Such reclassifications had no impact on net
earnings or shareholders equity. |
i) | $237 and $587 of Cost of Sales for the three and six months, respectively, related to
the roll-out of fair value inventory adjustments for sales of products that were in the
Bioline Groups inventory on the date of acquisition and, therefore, were valued at fair
value, rather than manufactured cost, in the opening balance sheet; and |
ii) | $255 and $507 of General and Administrative Expenses for the three and six months,
respectively, related to the amortization of specific identifiable intangible assets
recorded on the opening balance sheet, including customer relationships, license
agreements, non-compete agreements, manufacturing processes and trade names. |
Page 8
Three | Six | |||||||
Months | Months | |||||||
Ended | Ended | |||||||
March 31, | March 31, | |||||||
2011 | 2011 | |||||||
Net Sales |
$ | 3,683 | $ | 7,061 | ||||
Net Earnings |
$ | 177 | $ | 59 |
July 20, | ||||||||||||
2010 | Measurement | July 20, | ||||||||||
(as initially | Period | 2010 | ||||||||||
reported) | Adjustments | (as adjusted) | ||||||||||
Fair value of assets acquired - |
||||||||||||
Cash and equivalents |
$ | 3,445 | $ | 3,445 | ||||||||
Accounts receivable |
1,897 | 1,897 | ||||||||||
Inventories |
2,807 | 2,807 | ||||||||||
Other current assets |
371 | $ | (21 | ) | 350 | |||||||
Property, plant and equipment, net |
816 | 816 | ||||||||||
Goodwill |
13,166 | (102 | ) | 13,064 | ||||||||
Other intangible assets (estimated useful life): |
||||||||||||
Customer relationships (10 years) |
3,898 | 3,898 | ||||||||||
Manufacturing processes (6 years) |
1,467 | 1,467 | ||||||||||
License agreements (approx. 8 year wtd. avg.) |
718 | 718 | ||||||||||
Non-compete agreements (1 year) |
122 | 122 | ||||||||||
Trade names (10 years) |
995 | 995 | ||||||||||
29,702 | (123 | ) | 29,579 | |||||||||
Fair value of liabilities assumed - |
||||||||||||
Accounts payable and accrued expenses |
2,817 | 436 | 3,253 | |||||||||
Deferred income tax liabilities |
3,036 | (559 | ) | 2,477 | ||||||||
Total consideration paid |
$ | 23,849 | $ | | $ | 23,849 | ||||||
Page 9
Three | Six | |||||||
Months | Months | |||||||
Ended | Ended | |||||||
March 31, | March 31, | |||||||
2010 | 2010 | |||||||
Net Sales |
$ | 34,436 | $ | 79,847 | ||||
Net Earnings |
$ | 6,343 | $ | 15,578 | ||||
Diluted Earnings Per Common Share |
$ | 0.15 | $ | 0.38 |
March 31, | September 30, | |||||||
2011 | 2010 | |||||||
Raw materials |
$ | 6,982 | $ | 6,221 | ||||
Work-in-process |
7,270 | 6,784 | ||||||
Finished goods |
19,317 | 16,545 | ||||||
Gross inventory |
33,569 | 29,550 | ||||||
Less: Reserves |
(1,325 | ) | (1,130 | ) | ||||
Net inventory |
$ | 32,244 | $ | 28,420 | ||||
Page 10
U.S. | European | |||||||||||||||||||
Diagnostics | Diagnostics | Life Science | Eliminations(1) | Total | ||||||||||||||||
Three Months Ended March 31, 2011 |
||||||||||||||||||||
Net sales - |
||||||||||||||||||||
Third-party |
$ | 25,528 | $ | 6,385 | $ | 9,146 | $ | | $ | 41,059 | ||||||||||
Inter-segment |
2,455 | 3 | 105 | (2,563 | ) | | ||||||||||||||
Operating income |
9,807 | 50 | 923 | 182 | 10,962 | |||||||||||||||
Goodwill (March 31, 2011) |
1,381 | | 22,144 | | 23,525 | |||||||||||||||
Other intangible assets, net (March 31, 2011) |
1,923 | 2 | 10,288 | | 12,213 | |||||||||||||||
Total assets (March 31, 2011) |
71,090 | 20,423 | 92,642 | (26,984 | ) | 157,171 | ||||||||||||||
Three Months Ended March 31, 2010 |
||||||||||||||||||||
Net sales - |
||||||||||||||||||||
Third-party |
$ | 18,193 | $ | 6,591 | $ | 6,363 | $ | | $ | 31,147 | ||||||||||
Inter-segment |
2,550 | 3 | 169 | (2,722 | ) | | ||||||||||||||
Operating income |
6,571 | 1,093 | 1,320 | 141 | 9,125 | |||||||||||||||
Goodwill (September 30, 2010) |
1,381 | | 21,995 | | 23,376 | |||||||||||||||
Other intangible assets, net (September 30, 2010) |
2,283 | 9 | 11,035 | | 13,327 | |||||||||||||||
Total assets (September 30, 2010) |
72,030 | 18,044 | 90,462 | (25,821 | ) | 154,715 | ||||||||||||||
Six Months Ended March 31, 2011 |
||||||||||||||||||||
Net sales - |
||||||||||||||||||||
Third-party |
$ | 48,178 | $ | 12,314 | $ | 17,830 | $ | | $ | 78,322 | ||||||||||
Inter-segment |
5,063 | 7 | 318 | (5,388 | ) | | ||||||||||||||
Operating income |
18,381 | 803 | 702 | 166 | 20,052 | |||||||||||||||
Six Months Ended March 31, 2010 |
||||||||||||||||||||
Net sales - |
||||||||||||||||||||
Third-party |
$ | 48,897 | $ | 12,885 | $ | 11,822 | $ | | $ | 73,604 | ||||||||||
Inter-segment |
5,477 | 4 | 261 | (5,742 | ) | | ||||||||||||||
Operating income |
18,701 | 2,063 | 2,224 | (107 | ) | 22,881 |
(1) | Eliminations consist of inter-segment transactions. |
Page 11
March 31, 2011 | September 30, 2010 | |||||||||||||||
Gross | Gross | |||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | |||||||||||||
Value | Amortization | Value | Amortization | |||||||||||||
Manufacturing technologies, core
products and cell lines |
$ | 11,665 | $ | 8,141 | $ | 11,644 | $ | 7,693 | ||||||||
Trademarks, licenses and patents |
3,633 | 1,239 | 3,547 | 997 | ||||||||||||
Customer lists and supply agreements |
12,326 | 6,073 | 12,537 | 5,816 | ||||||||||||
Non-compete agreements |
128 | 86 | 126 | 21 | ||||||||||||
$ | 27,752 | $ | 15,539 | $ | 27,854 | $ | 14,527 | |||||||||
Page 12
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Money market funds |
$ | 10,258 | $ | | $ | | $ | 10,258 | ||||||||
Total |
$ | 10,258 | $ | | $ | | $ | 10,258 | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Money market funds |
$ | 10,249 | $ | | $ | | $ | 10,249 | ||||||||
Total |
$ | 10,249 | $ | | $ | | $ | 10,249 | ||||||||
ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Page 13
1. | These measures help to appropriately evaluate and compare the results of operations from
period to period by removing the impact of non-routine costs related to reorganizing our
European and Global Sales and Marketing Leadership; 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. |
Three Months | Six Months | |||||||||||||||
Ended March 31, | Ended March 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net Earnings - |
||||||||||||||||
U.S. GAAP basis |
$ | 7,260 | $ | 5,980 | $ | 13,285 | $ | 14,901 | ||||||||
European and Global Sales & Marketing
Leadership Reorganization costs, inclusive
of the income tax effect (1) |
872 | | 872 | | ||||||||||||
Excluding Leadership Reorganization costs |
$ | 8,132 | $ | 5,980 | $ | 14,157 | $ | 14,901 | ||||||||
Net Earnings per Basic Common Share - |
||||||||||||||||
U.S. GAAP basis |
$ | 0.18 | $ | 0.15 | $ | 0.33 | $ | 0.37 | ||||||||
European and Global Sales & Marketing
Leadership Reorganization costs, inclusive
of the income tax effect (1) |
0.02 | | 0.02 | | ||||||||||||
Excluding Leadership Reorganization costs |
$ | 0.20 | $ | 0.15 | $ | 0.35 | $ | 0.37 | ||||||||
Net Earnings per Diluted Common Share - |
||||||||||||||||
U.S. GAAP basis |
$ | 0.18 | $ | 0.15 | $ | 0.32 | $ | 0.36 | ||||||||
European and Global Sales & Marketing
Leadership Reorganization costs, inclusive
of the income tax effect (1) |
0.02 | | 0.02 | | ||||||||||||
Excluding Leadership Reorganization costs |
$ | 0.20 | $ | 0.15 | $ | 0.34 | $ | 0.36 | ||||||||
(1) | The income tax effects of the Leadership Reorganization costs totaled $368 and were calculated
using the effective tax rates of the jurisdictions in which the costs were incurred. |
Page 14
Page 15
Page 16
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||
2011 | 2010 | Inc (Dec) | 2011 | 2010 | Inc (Dec) | |||||||||||||||||||
U.S. Diagnostics |
$ | 25,528 | $ | 18,193 | 40 | % | $ | 48,178 | $ | 48,897 | (1 | )% | ||||||||||||
European Diagnostics |
6,385 | 6,591 | (3 | )% | 12,314 | 12,885 | (4 | )% | ||||||||||||||||
Life Science |
9,146 | 6,363 | 44 | % | 17,830 | 11,822 | 51 | % | ||||||||||||||||
Consolidated |
$ | 41,059 | $ | 31,147 | 32 | % | $ | 78,322 | $ | 73,604 | 6 | % | ||||||||||||
International - |
||||||||||||||||||||||||
U.S. Diagnostics |
$ | 1,617 | $ | 1,248 | 30 | % | $ | 3,213 | $ | 2,977 | 8 | % | ||||||||||||
European Diagnostics |
6,385 | 6,591 | (3 | )% | 12,314 | 12,885 | (4 | )% | ||||||||||||||||
Life Science |
5,284 | 2,792 | 89 | % | 9,873 | 5,252 | 88 | % | ||||||||||||||||
Total |
$ | 13,286 | $ | 10,631 | 25 | % | $ | 25,400 | $ | 21,114 | 20 | % | ||||||||||||
% of total sales |
32 | % | 34 | % | 32 | % | 29 | % | ||||||||||||||||
Page 17
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Gross Profit |
$ | 26,256 | $ | 20,141 | 30 | % | $ | 49,804 | $ | 45,585 | 9 | % | ||||||||||||
Gross Profit Margin |
64 | % | 65 | % | -1 point | 64 | % | 62 | % | +2 points |
Three Months Ended March 31, 2011 | ||||||||||||||||||||
European and | ||||||||||||||||||||
Global Sales & | ||||||||||||||||||||
Marketing | ||||||||||||||||||||
Research & | Selling & | General & | Leadership | Total Operating | ||||||||||||||||
Development | Marketing | Administrative | Reorganization | Expenses | ||||||||||||||||
2010 Expenses |
$ | 2,337 | $ | 4,356 | $ | 4,323 | $ | | $ | 11,016 | ||||||||||
% of Sales |
8 | % | 14 | % | 14 | % | | % | 35 | % | ||||||||||
Fiscal 2011 Increases
(Decreases): |
||||||||||||||||||||
U.S. Diagnostics |
(140 | ) | 826 | (14 | ) | 365 | 1,037 | |||||||||||||
European Diagnostics |
| 14 | (52 | ) | 875 | 837 | ||||||||||||||
Life Science |
||||||||||||||||||||
- Bioline Group |
144 | 857 | 1,390 | | 2,391 | |||||||||||||||
- Other |
18 | 7 | (12 | ) | | 13 | ||||||||||||||
2011 Expenses |
$ | 2,359 | $ | 6,060 | $ | 5,635 | $ | 1,240 | $ | 15,294 | ||||||||||
% of Sales |
6 | % | 15 | % | 14 | % | 3 | % | 37 | % | ||||||||||
% Increase |
1 | % | 39 | % | 30 | % | | % | 39 | % |
Page 18
Six Months Ended March 31, 2011 | ||||||||||||||||||||
European and | ||||||||||||||||||||
Global Sales & | ||||||||||||||||||||
Marketing | ||||||||||||||||||||
Research & | Selling & | General & | Leadership | Total Operating | ||||||||||||||||
Development | Marketing | Administrative | Reorganization | Expenses | ||||||||||||||||
2010 Expenses |
$ | 4,448 | $ | 9,298 | $ | 8,958 | $ | | $ | 22,704 | ||||||||||
% of Sales |
6 | % | 13 | % | 12 | % | | % | 31 | % | ||||||||||
Fiscal 2011 Increases
(Decreases): |
||||||||||||||||||||
U.S. Diagnostics |
(180 | ) | 926 | 244 | 365 | 1,355 | ||||||||||||||
European Diagnostics |
| (67 | ) | (88 | ) | 875 | 720 | |||||||||||||
Life Science |
||||||||||||||||||||
- Bioline Group |
354 | 1,735 | 2,667 | | 4,756 | |||||||||||||||
- Other |
104 | (30 | ) | 143 | | 217 | ||||||||||||||
2011 Expenses |
$ | 4,726 | $ | 11,862 | $ | 11,924 | $ | 1,240 | $ | 29,752 | ||||||||||
% of Sales |
6 | % | 15 | % | 15 | % | 2 | % | 38 | % | ||||||||||
% Increase |
6 | % | 28 | % | 33 | % | | % | 31 | % |
Selling & Marketing |
1) | Increased sales bonus expense of approximately $425 and $310 for the quarterly
and six month year-to-date periods, respectively, due to increased sales performance; |
||
2) | Increased samples and promotional expense of approximately $200 and $290 for
the quarterly and six month year-to-date periods, respectively, resulting in large part
from an effort to move flu inventory manufactured by third parties prior to its
expiration; and |
||
3) | Increased travel expenses related to illumigene® product placement
costs for the quarterly and six month year-to-date periods of approximately $190 and
$260, respectively. |
General & Administrative |
||
An approximate $400 increase in stock-based compensation expense for
restricted stock grants during the fiscal 2011 first quarter. |
Page 19
Page 20
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
Page 21
ITEM 1A. | RISK FACTORS |
ITEM 6. | EXHIBITS |
10.22 | Antonio Interno Retirement-Related Agreements (Filed herewith) |
|||
31.1 | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rule
13a-14(a)/15d-14(a) (Filed herewith) |
|||
31.2 | Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rule
13a-14(a)/15d-14(a) (Filed herewith) |
|||
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 (Filed
herewith) |
Page 22
MERIDIAN BIOSCIENCE, INC. |
||||
Date: May 10, 2011 | /s/ Melissa A. Lueke | |||
Melissa A. Lueke | ||||
Executive Vice President and Chief Financial Officer |
Page 23
2
3
4
WITNESSES: | Company: | |||||||
MERIDIAN BIOSCIENCE, INC. | ||||||||
/s/ Fabio Rossella | By: | /s/ John A. Kraeutler | ||||||
Fabio Rossella
|
Name: | John A. Kraeutler | ||||||
Witness for Interno
|
Title: | CEO | ||||||
ANTONIO ALESSANDRO INTERNO: | ||||||||
/s/ Torretta Simona | /s/ Antonio Alessandro Interno | |||||||
Torretta Simona |
||||||||
Witness for Interno |
||||||||
/s/ Melissa Lueke |
||||||||
Witness for Kraeutler |
5
Sincerely, ANTONIO ALESSANDRO INTERNO |
||||
/s/ Antonio Alessandro Interno |
1. | Professional Services. Mr. Interno shall provide professional services to
Meridian, as an independent contractor, with the objective to build and promote brand
awareness and equity within Africa, Europe, the Middle East and Scandinavia, related to the
Meridian Bioscience trade name. Mr. Interno shall perform such services to, and on behalf
of, Meridian on a monthly basis, including, but not limited to, the following (Services): |
a. | Identifying and introducing key opinion leaders, hospitals,
laboratories, physicians and other healthcare diagnostic supply chain participants
with the objective of promoting the Meridian brand; |
b. | Alerting management of competitors at risk for possible intellectual
property infringement that could harm the Meridian brand; |
c. | Identifying potential product sourcing opportunities that could
complement the Meridian brand; and |
d. | Other similar activities with the objective of promoting the Meridian
brand. |
2
2. | Fees and Payments. Meridian shall pay Mr. Interno as full payment for Services
rendered by him hereunder, at a monthly rate of six-thousand five-hundred Euros (6,500.00)
(Professional Services Fee). The Professional Services Fee shall be payable by Meridian
on the 15th calendar day of each month, provided that prior to the
10th calendar day of each month, Mr. Interno has submitted to Meridian an
invoice for that month. Mr. Interno shall submit his invoices to Meridians Chief
Financial Officer (CFO) or Chief Executive Officer (CEO) via e-mail or facsimile. |
3. | Term. Subject to the provisions of this Section 3, the term of this Agreement
(the Term) shall commence on the date hereof and end on December 31, 2012, unless this
Agreement is terminated by mutual written agreement of the parties. Notwithstanding the
foregoing, this Agreement and all rights of Mr. Interno under this Agreement will terminate
(except as otherwise provided in this Section), |
a. | Upon the death of Mr. Interno; |
b. | Upon breach of any provision of this Agreement. |
4. | Authority and Indemnification of Meridian. Mr. Interno represents that he is
not restricted or prohibited in any manner from entering into this Agreement and performing
the duties for Meridian as herein provided. Mr. Interno shall indemnify and save harmless
Meridian from any damages, liabilities, actions, suits or other claims, and from reasonable
attorneys fees and costs incurred by Meridian in defending against same, should Mr.
Internos representations set forth in this Section 4 be challenged. |
5. | Severability. If any of the provisions of this Agreement are held to be
illegal, invalid or unenforceable in any respect, Meridian and Mr. Interno agree that such
term or provision shall be deemed to be modified to the extent necessary to permit its
enforcement to the maximum extent permitted by applicable law. If any of the provisions of
this Agreement are held to be illegal, invalid or unenforceable in any respect, the
remainder of this Agreement and all other provisions hereof shall not be affected thereby. |
6. | Parties Bound. This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective heirs, administrators, executors, legal
representatives, successors and permitted assigns; provided, however, that
Mr. Interno shall not assign any of Mr. Internos rights or delegate any of his duties
hereunder without the prior written consent of Meridian. Meridian shall not assign any of
its rights or delegate any of its duties hereunder to any person or entity without the
prior written consent of Mr. Interno. |
3
7. | Governing Law. This Agreement shall be governed by the internal substantive
laws of the State of Ohio, USA, without reference to conflict of laws principles. All
claims, disputes, or lawsuits arising under or from this Agreement shall be exclusively
instituted in the state and federal courts situated in Hamilton County, Ohio, U.S.A., and
Meridian and Mr. Interno hereby unconditionally and irrevocably submit and consent to the
jurisdiction and venue of any such court for such purpose. |
8. | Entire Agreement and Amendments. Meridian and Mr. Interno agree that this
Agreement constitutes the entire agreement between them with respect to the subject matter
hereof, and that any and all prior discussions, negotiations, agreements and understandings
including, without limitation, any prior agreement between Meridian and Mr. Interno are
hereby superseded. The terms and provisions of this Agreement shall not be changed,
amended, waived, modified or terminated in any respect whatsoever except by a written
instrument executed by Meridian and Mr. Interno. |
9. | No Waiver of Rights. Neither any failure nor any delay on the part of Meridian
in exercising any right, power or privilege hereunder shall operate as a waiver thereof on
the part of Meridian nor shall a single or partial exercise thereof preclude any other or
further exercise or the exercise of any other right, power or privilege by Meridian. |
10. | Notice. Any and all notices given or required to be given hereunder shall be
sent by personal delivery or by certified mail, return receipt requested, and shall
conclusively be deemed to have been received on the date such notice is delivered at the
address specified below (or such other address as may be specified in writing by the
parties hereof) or, in the case of certified mail, on the fifth (5th) business day
following the date on which it was mailed. |
If to Meridian:
|
MERIDIAN BIOSCIENCE, INC. | |
3471 River Hills Drive | ||
Cincinnati, Ohio 45244 | ||
Attention: John A. Kraeutler |
11. | Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and all of which shall constitute one and the
same agreement. |
12. | Headings; Gender; Number. The headings contained in this Agreement are for
convenience only and shall not be construed as substantive provisions of this Agreement.
Words of any gender shall include any other gender, unless the context requires otherwise.
Singular words shall include the plural and plural words shall include the singular, unless
the context requires otherwise. |
4
WITNESSES: | Company: | |||||||
MERIDIAN BIOSCIENCE, INC. | ||||||||
/s/ Melissa Lueke | By: | /s/ John A Kraeutler | ||||||
Melissa Lueke
|
Name: | John A. Kraeutler | ||||||
Title: | CEO | |||||||
ANTONIO ALESSANDRO INTERNO: | ||||||||
/s/ Antonio Alessandro Interno | ||||||||
2
A. | With the Board of Directors resolution dated September 7, 1994 Mr. Internò was
appointed Managing Director of MBE Italy for an indefinite period of time; |
B. | On December 1, 2001, Mr. Internò was hired by MBE Italy as an Executive under the
National Collective Labour Agreement for Executives of the Trade sector (hereinafter
referred to as CBA); |
3
C. | In addition, Mr. Internò holds the following corporate offices: (i) Chairman of the
Board of Directors and Managing Director of Meridian Bioscience Europe S.A.; (ii) Chairman
of the Board of Directors and Managing Director of Meridian Bioscience S.A.; (iii) Chairman
of the Board of Directors and Managing Director of Meridian Bioscience Europe B.V.; |
D. | in the spirit of co-operation which has always characterised their relationships, the
parties are willing to settle amicably, once for all, any past or future questions
regarding the execution and the termination of both the employment relationship with MBE
Italy and all the above mentioned directorships, within a sole and general and full
settlement. |
1. | Recitals |
(1) | The above Recitals are part of this agreement. |
2. | Termination by mutual consent of the employment relationship with MBE Italy |
(1) | MBE Italy proposed to the Executive to terminate his employment contract by
mutual consent and offered him a leaving incentive. |
(2) | The Executive accepted the above proposal at the conditions set forth
hereunder. |
(3) | The employment contract between Mr. Internò and MBE Italy is deemed terminated
by mutual consent effective as of April 1, 2011, with termination on the same date of
any mutual obligations deriving from the law and/or from the contract. |
(4) | Mr. Internò shall return, within five (5) days from April 1, 2011, all the
company items and goods currently in his possession. |
||
(5) | Mr. Internò shall receive: |
a. | the fixed salary until the date of termination of the employment
relationship; |
b. | the supplementary monthly salary instalments accrued
(13th and 14th month provisions) until the actual
termination date; |
c. | the indemnity in lieu of accrued and unused holidays and leaves; |
d. | he severance payment (Trattamento di Fine Rapporto), if not
transferred to third parties. |
(6) | All other benefits shall cease as of April 1, 2011. |
4
3. | Leaving incentive |
(1) | In addition to the amounts provided under clause 2.(5), MBE Italy shall pay
the Executive a gross amount of EUR 550.000,00 as leaving incentive and as
compensation for the termination by mutual consent of the employment relationship
indicated under point B. of the Recitals. It is agreed that such payment is
conditioned to the formalization of the settlement agreement as provided under clause
7.(1). |
(2) | The amount specified under clause 3. (1) is not subject to any social
contribution payments in accordance with Section 12 of Italian Law no. 153 of 30 April
1969, as amended by Section 6 of Law Decree no. 314 of 2 September 1997. This amount
shall be subject to personal income tax (i.e. Imposta sul reddito delle persone
fisiche IRPEF), as calculated according to the criteria provided by Sections 17 and
19 of Presidential Decree no. 917 of 22 December 1986 (TUIR). Payment of the gross
amount specified under clause 3.(1) shall be made to Executive after deducting the
withholding taxes. |
4. | Termination of the corporate offices |
(1) | Mr. Internò undertakes to renounce and resign with immediate effect from his
office of Director and Managing Director of MBE Italy, by signing and sending, by
March 31, 2011 and no later, the relevant resignation letters attached hereto as
Exhibit A to the members of Board of Directors and to the Chairman of the Board of
Statutory Auditors. In any case, the Executive agrees that this agreement represents
the renouncement of his offices with immediate effect according to law and to Section
2385 of the Italian Civil Code. |
(2) | Furthermore, Mr. Internò undertakes to renounce and resign with immediate
effect from his corporate offices indicated under point C of the Recitals as of April
1, 2011, by signing and sending, by March 31, 2011 and no later, the relevant
resignation letters attached hereto as Exhibits B, C and D to the competent corporate
boards as provided by the local laws. In any case, Mr. Internò agrees that this
agreement represents the renouncement of his corporate offices held at all the
aforementioned companies with immediate effect, according to the local laws of the
countries where these companies are located. |
5
(3) | Moreover, Mr. Internò undertakes to hand over to the person who will be
indicated, by and not later than April 6, 2011, all and any information and
description relating to MBE Italy and/or to any other company of the Group, such as
technical, organizational, financial or commercial information as well as any other
information or corporate secret relating to such companies that Mr. Internò has
learned during his employment and/or corporate relationships. By way of example and
without limitation, Mr. Internò undertakes to disclose, before the above mentioned
term, to the person who will be indicated any information concerning trade
negotiations and any talks pending or potential with actual and/or prospective
customers and/or with any third party, models or technical solutions, organizational
practices, company and Group plans, names of customers and suppliers, development and
investment plans as well as any other information relating to the activity carried out
by any company of the Group that he has been informed during the employment and/or the
corporate relationships hereunder. All of the corporate documents, of any kind,
including hardware and software, personal notes on acts or facts concerning the
employment and the corporate relationships hereunder, plans, corporate production
processes, methods, know-how, trade secrets, schemes, technologies, reports,
researches, correspondence and personal notes on acts or facts relating to the
Executives activity, shall be handed over by the aforesaid term to the person who
will be indicated as above. |
5. | Non competition |
(1) | In consideration of the directorships held by Mr. Internò at MBE Italy, it is
provided that he shall remain subject to the non-competition agreement executed on
February 19, 1991 and to the terms and conditions set forth therein for a period of
five years starting from April 1, 2011. |
6. | Waivers |
(1) | In the context of a general novation settlement pursuant to Sections 1965 and
1975 of the Italian Civil Code, Mr. Internò waives to any claim against Meridian
Bioscience Europe S.r.l., as well as to any claim towards any other parent company,
subsidiary, or controlled company or any other company of the Meridian Group, in Italy
or abroad, for any right arising from or related to the employment relationship
indicated under point B. of the Recitals and its termination, including any right
provided by law and by the CBA. By way of example, but not limited to, the Executive
waives all claims for different seniority, salary differences and outstanding
remuneration of any kind (including bonuses and rights related to
and deriving from any incentive plan that the Executive participated in), withholding
taxes, any kind of expenses refund, different calculation of salary items, paid in any
form, in relation to legal and contractual institutes. Furthermore the Executive waives
any indemnities as well as any claims for damages including tort and/or non-material
damages according to Sections 2043, 2059, 2087, 2103 and 2116, second paragraph, of the
Italian Civil Code. |
6
(2) | Moreover, still within the aforesaid context of general and full settlement
pursuant to Sections 1965 and 1975 of the Italian Civil Code, Mr. Internò waives to
claim any potential right that may arise out of or be related to: |
(i) | the execution and the termination of the directorships indicated
under points A. of the Recitals, against MBE Italy and/or against any other
company connected to or controlled by such company, as well as against any other
company of the Meridian Group anywhere located or incorporated; |
(ii) | the execution and the termination of the directorships indicated
under points C. of the Recitals, against the respective companies in which the
corporate offices therein mentioned are held by Mr. Internò and/or against any
other company connected to or controlled by those companies, as well as against
any other company of the Meridian Group anywhere located or incorporated. |
(3) | The waivers under clause 6.(2) include, but are not limited to, any different
qualification of the relevant corporate offices, any right concerning outstanding
remuneration of any kind (including eventual bonuses and rights related to and/or
deriving from any incentive plan that Mr. Internò participated in), withholding taxes,
any kind of expenses refund, any other right deriving from law. Mr. Internò also waives
any indemnities and any claims for damages including tort and/or non-material damages
according to sections 2043, 2059 and 2087 of the Italian Civil Code, as well as any
possible remunerations, indemnities, compensations and claim relating to or deriving
from the corporate offices indicated under point A. of the Recitals, including the
rights deriving from Sections 2383, paragraph 3, and 2389 of the Italian Civil Code. |
(4) | Furthermore, Mr. Internò expressly represents and warrants that as at the date
of execution of this agreement he is not aware of any potential claim, civil and/or
criminal proceedings against him or any of the undersigned companies that may arise
from or anyhow be connected with the performance of the directorships and/or the
employment relationships specified under points A., B. and C. of the Recitals. |
7
(5) | Against the waivers indicated under clauses 6.(1), 6.(2) and 6.(3), MBE Italy,
Meridian Bioscience Europe S.A., Meridian Bioscience SA and Meridian Bioscience B.V.
accept such waivers and expressly waive any action and/or claim against Mr. Internò in
relation to any responsibility connected to his corporate offices of Managing
Director/Chairman of the Board of Directors/legal representative of the aforementioned
corporations. Moreover, the above corporations represent that they have no further
claim against Mr. Internò in connection with the above corporate offices, save for any
eventual damages deriving to the corporations from any act and/or deed executed by Mr.
Internò with gross negligence or willful misconduct and save for any illegal act
committed by Mr. Internò in violation of Italian laws and/or US Foreign Corrupt
Practices Act and/or US Export Control Laws. |
(6) | In addition, the corporations MBE Italy, Meridian Bioscience Europe S.A.,
Meridian Bioscience S.A. and Meridian Bioscience B.V. undertake to keep Mr. Internò
unharmed and guaranteed against any possible negative economic consequence which may
arise in connection with any claim and/or demand and/or dispute brought by third
parties against Mr. Internò in his capacity as Managing Director/Chairman of the Board
of Directors/legal representative of the aforementioned corporations, save for any act
and/or deed executed by Mr. Internò with gross negligence or willful misconduct and
except for any illegal act committed by Mr. Internò in violation of Italian laws and/or
US Foreign Corrupt Practices Act and/or US Export Control Laws. |
(7) | More specifically, MBE Italy hereby expressly represents to keep Mr. Internò
unharmed and indemnified against any present or future claim and/or demand and/or
dispute which may involve Mr. Internò in his capacity as Managing Director/Chairman of
the Board of Directors/legal representative/Executive of MBE Italy, save for any act
and/or deed executed by Mr. Internò with gross negligence or willful misconduct and
except for any illegal act committed by Mr. Internò in violation of Italian laws
and/or US Foreign Corrupt Practices Act and/or US Export Control Laws. |
(8) | The corporations MBE Italy, Meridian Bioscience Europe S.A,. Meridian
Bioscience SA and Meridian Bioscience BV undertake to bear the costs of any possible
fine and/or penalty, which may be inflicted to Mr. Internò due to the personal and/or
joint responsibility with the aforementioned corporations, for facts
relating to or connected with his corporate offices of Managing Director/Chairman of
the Board of Directors/legal representative/Executive of the same corporations, save
for any act and/or deed executed by Mr. Internò with gross negligence or willful
misconduct and except for any illegal act committed by Mr. Internò in violation of
Italian laws and/or US Foreign Corrupt Practices Act and/or US Export Control Laws. |
8
(9) | The parties declare that with execution of this settlement, and the
fulfillment of the same, they do not have any further claim deriving from the
execution and the termination of the employment relationship and/or any directorship
or corporate office mentioned in this agreement |
7. | Settlement |
(1) | The payment of the amounts provided for in clause 3.(1) shall be made on the
condition that Mr. Internò signs, in front of one of the offices indicated by Sections
410 and 411 of the Italian Civil Procedure Code, an additional settlement agreement
with MBE Italy, that shall have the exact same contents of this agreement within about
60 days from today subject to the availability of the offices. |
8. | Terms of payment |
(1) | The payment of the amount set forth under clause 2.(5) shall be made with the
usual terms and methods. |
(2) | The payment of the gross amount sets forth under clause 3.(1) shall be made,
after deducting withholding taxes as provided by Italian law, by wire transfer to the
bank account of Mr. Internò already used by MBE Italy to deposit his employment salary,
within maximum 60 days from the termination of the employment relationship and in any
case after the formalization of the settlement agreement as provided under clause
7.(1). |
Mr. Antonio Alessandro Internò
|
/s/ Antonio Alessandro Internò
|
|||
Meridian Bioscience Europe S.r.l.
|
/s/ John A. Kraeutler
|
|||
Meridian Bioscience Europe S.A.
|
/s/ John A. Kraeutler
|
|||
Meridian Bioscience S.A.
|
/s/ John A. Kraeutler
|
|||
Meridian Bioscience Europe B.V.
|
/s/ John A. Kraeutler
|
9
Antonio Alessandro Internò | ||||
/s/ Antonio Alessandro Internò | ||||
10
Antonio Alessandro Internò | ||||
/s/ Antonio Alessandro Internò | ||||
11
Antonio Alessandro Internò | ||||
/s/ Antonio Alessandro Internò | ||||
12
(i) | that the undersigned is a member of the Management Board of Meridian Bioscience Europe B.V.,
a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid)
under Dutch law, having its registered office at Boxtel (the Netherlands) and having its
correspondence address at Halderheiweg 6, 5282 SN Boxtel (the Netherlands), (hereinafter: the
Company); |
(ii) | to resign as a member of the Management Board of the Company with effect as from 31 March
2011; |
(iii) | not to have and that he will not have as per his resignation becoming effective any claim
against the Company relating to his position as a member of the Management Board of the
Company. |
Antonio Alessandro Internò | ||||
/s/ Antonio Alessandro Internò | ||||
13
14
A. | Mr. Internò has been an Executive of Meridian Bioscience Europe S.r.l., a company
belonging to Meridian Group, since December 1 2001 until April 1, 2011; |
B. | during his employment relationship with MBE Italy, Mr. Internò has participated to the
Equity Plan 2004 Equity Compensation Plan as Amended and Restated trough January 22,
2008, approved by Meridian USA on 2004 and afterwards amended on January 22, 2008; |
C. | as per the provisions of such Equity Plan, the following stock units have been
assigned to Mr. Internò: |
(i) | no. 7,500 restricted stock units, awarded on November 12, 2009, which have
became fully vested upon the termination of the employment relationship of Mr. Internò
with MBE Italy; |
(ii) | no. 7,500 restricted stock units, awarded on November 11, 2010, which have
became fully vested upon the termination of the employment relationship of Mr. Internò
with MBE Italy; |
15
(iii) | no. 7,500 performance-based stock units, awarded on November 11, 2010,
which will become fully vested when the actual earnings of Meridian USA will be
released to the public indicatively on November 2011, upon condition that the net
earnings of Meridian USA will exceed 33,400,000 US dollars; |
D. | the employment relationship between MBE Italy and the Executive is terminated by
mutual consent by means of the settlement agreement executed between the parties on March
22, 2011; |
E. | within such settlement agreement MBE Italy has undertaken to pay to Mr. Internò, on
top of the normal end-of-service accruals, an amount as leaving incentive and as
compensation for the termination of the employment relationship equal to gross Euro
550,000 (fivehundrenfitythousand/00) by and no later than 60 days from the termination of
the employment relationship and anyhow on condition that the settlement agreement will
have been formalized before one of the offices indicated by Sections 410 and 411 of
Italian Civil Procedure Code; |
F. | the parties have not yet formalized and executed the settlement agreement mentioned
under point E. above and therefore MBE Italy has not yet paid to the Executive the
aforesaid amount as leaving incentive and as compensation for the termination of the
employment relationship. |
1. | Recitals |
(1) | The above Recitals are part of this agreement. |
2. | Set-off agreement |
(1) | MBE Italy and Meridian USA hereby states that the withholding taxes that shall
be collected on the counter value of the shares that will be issued on the basis of
the 15,000 restricted stock units mentioned under points C.(i) and C.(ii) of the
Recitals, reckoned as at April 1 2011, is equal to Euro 108,914.97
(onehundredeightthousandninehundredfourteen/97) |
16
(2) | Mr. Internò hereby acknowledges the correctness of such amount and expressly
agrees that the amount of Euro 108,914.97
(onehundredeightthousandninehundredfourteen/97) shall be offset, pursuant to Article
1252 of Italian Civil Code, against the credit claimed by the Executive from MBE Italy
and thus that such amount shall be deducted from the net amount equivalent to the
gross amount of Euro 550,000
(fivehundredfiftythousand/00) after tax, payable to the Executive by MBE Italy as
provided for by the settlement agreement executed on March 22, 2011. |
Mr. Antonio Alessandro Internò
|
/s/ Antonio Alessandro Internò | |||
Meridian Bioscience Europe S.r.l.
|
/s/ Fabio Rossella | |||
Meridian Bioscience Inc.
|
/s/ John A. Kraeutler | |||
17
1. | I have reviewed this quarterly report on Form 10-Q of Meridian Bioscience, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared; |
b) | Designed such internal controls over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of the financial statements for external purposes in accordance with generally accepted
accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such
evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the registrants
internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of registrants board of directors (or persons performing the equivalent
functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
b) | Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
/s/ John A. Kraeutler |
||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Meridian Bioscience, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared; |
b) | Designed such internal controls over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of the financial statements for external purposes in accordance with generally accepted
accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such
evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the registrants
internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of registrants board of directors (or persons performing the equivalent
functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
b) | Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
/s/ Melissa A. Lueke |
||
Executive Vice President and Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company. |
/s/ John A. Kraeutler |
||
Chief Executive Officer |
||
May 10, 2011 |
||
/s/ Melissa A. Lueke |
||
Executive Vice President and |
||
Chief Financial Officer |
||
May 10, 2011 |
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