10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2011

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 0-14902

MERIDIAN BIOSCIENCE, INC.

Incorporated under the laws of Ohio

31-0888197

(I.R.S. Employer Identification No.)

3471 River Hills Drive
Cincinnati, Ohio 45244
(513) 271-3700

Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer o Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding July 31, 2011
Common Stock, no par value	41,051,356

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q

	Page(s)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Statements of Operations Three and Nine Months Ended June 30, 2011 and 2010		1
Condensed Consolidated Statements of Cash Flows Nine Months Ended June 30, 2011 and 2010		2
Condensed Consolidated Balance Sheets June 30, 2011 and September 30, 2010		3-4
Condensed Consolidated Statement of Changes in Shareholders’ Equity Nine Months Ended June 30, 2011		5
Notes to Condensed Consolidated Financial Statements		6-12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		13-21
Item 3. Quantitative and Qualitative Disclosures About Market Risk		21
Item 4. Controls and Procedures		21
PART II. OTHER INFORMATION
Item 1A. Risk Factors		22
Item 6. Exhibits		22
Signature		23
EX-10.4
EX-31.1
EX-31.2
EX-32
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements accompanied by meaningful cautionary statements. Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, which may be identified by words such as “estimates”, “anticipates”, “projects”, “plans”, “seeks”, “may”, “will”, “expects”, “intends”, “believes”, “should” and similar expressions or the negative versions thereof and which also may be identified by their context. Such statements, whether expressed or implied, are based upon current expectations of the Company and speak only as of the date made. The Company assumes no obligation to publicly update or revise any forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. These statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially, including, without limitation, the following: Meridian’s continued growth depends, in part, on its ability to introduce into the marketplace enhancements of existing products or new products that incorporate technological advances, meet customer requirements and respond to products developed by Meridian’s competition. While Meridian has introduced a number of internally developed products, there can be no assurance that it will be successful in the future in introducing such products on a timely basis. Ongoing consolidations of reference laboratories and formation of multi-hospital alliances may cause adverse changes to pricing and distribution. Recessionary pressures on the economy and the markets in which our customers operate, as well as adverse trends in buying patterns from customers can change expected results. Costs and difficulties in complying with laws and regulations administered by the United States Food and Drug Administration can result in unanticipated expenses and delays and interruptions to the sale of new and existing products. Changes in the relative strength or weakness of the U.S. dollar can also change expected results. One of Meridian’s main growth strategies is the acquisition of companies and product lines. There can be no assurance that additional acquisitions will be consummated or that, if consummated, will be successful and the acquired businesses will be successfully integrated into Meridian’s operations. There may be risks that acquisitions may disrupt operations and may pose potential difficulties in employee retention and there may be additional risks with respect to Meridian’s ability to recognize the benefits of acquisitions, including potential synergies and cost savings or the failure of acquisitions to achieve their plans and objectives. The Company cannot predict the possible impact of recently-enacted United States healthcare legislation and any similar initiatives in other countries on its results of operations. In addition to the factors described in this paragraph, Part I, Item 1A Risk Factors of our Form 10-K contains a list and description of uncertainties, risks and other matters that may affect the Company.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

	Three Months Ended					Nine Months Ended
	June 30,					June 30,
	2011		2010			2011		2010
NET SALES	$	40,052	$	33,857		$	118,374	$	107,461
COST OF SALES		14,626		12,121			43,046		40,073
GROSS PROFIT		25,426		21,736			75,328		67,388
OPERATING EXPENSES
Research and development		2,710		2,128			7,383		6,521
Selling and marketing		6,143		4,287			17,847		13,495
General and administrative		6,442		4,872			18,675		14,042
European and global sales & marketing leadership reorganization		—		—			1,240		—
Bioline Group transaction costs		—		673			—		673
Total operating expenses		15,295		11,960			45,145		34,731
OPERATING INCOME		10,131		9,776			30,183		32,657
OTHER INCOME (EXPENSE)
Interest income		26		29			70		90
Other, net		36		(9	)		357		(17	)
Total other income (expense)		62		20			427		73
EARNINGS BEFORE INCOME TAXES		10,193		9,796			30,610		32,730
INCOME TAX PROVISION		3,357		3,372			10,489		11,405
NET EARNINGS	$	6,836	$	6,424		$	20,121	$	21,325
BASIC EARNINGS PER COMMON SHARE	$	0.17	$	0.16		$	0.49	$	0.53
DILUTED EARNINGS PER COMMON SHARE	$	0.17	$	0.16		$	0.49	$	0.52
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC		40,737		40,535			40,680		40,510
EFFECT OF DILUTIVE STOCK OPTIONS		657		616			673		656
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED		41,394		41,151			41,353		41,166
ANTI-DILUTIVE SECURITIES:
Common share options		160		234			177		207
DIVIDENDS DECLARED PER COMMON SHARE	$	0.19	$	0.19		$	0.57	$	0.55

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 1

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(dollars in thousands)

Nine Months Ended June 30,	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$	20,121		$	21,325
Non-cash items:
Depreciation of property, plant and equipment		2,525			2,307
Amortization of intangible assets		1,796			1,079
Amortization of deferred illumigene contract costs		81			—
Stock-based compensation		1,981			1,255
Deferred income taxes		(1,622	)		(108	)
Loss on disposition of fixed assets		7			15
Unrealized loss on auction-rate securities and rights, net		—			10
Change in current assets		(10,176	)		2,151
Change in current liabilities		2,451			(4,327	)
Other, net		(546	)		(6	)
Net cash provided by operating activities		16,618			23,701
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment		(7,666	)		(3,681	)
Purchases of intangibles and other assets		(12	)		—
Purchases of short-term investments		—			(1,000	)
Proceeds from sales and calls of short-term investments		—			8,275
Net cash (used for) provided by investing activities		(7,678	)		3,594
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid		(23,192	)		(22,282	)
Proceeds and tax benefits from exercises of stock options		1,481			559
Net cash used for financing activities		(21,711	)		(21,723	)
Effect of Exchange Rate Changes on Cash and Equivalents		455			(1,383	)
Net (Decrease) Increase in Cash and Equivalents		(12,316	)		4,189
Cash and Equivalents at Beginning of Period		37,879			54,030
Cash and Equivalents at End of Period	$	25,563		$	58,219

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 2

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(dollars in thousands)

ASSETS

	June 30,		September 30,
	2011		2010
CURRENT ASSETS
Cash and equivalents	$	25,563	$	37,879
Accounts receivable, less allowances of $125 and $241		23,987		22,064
Inventories		34,066		28,420
Prepaid expenses and other current assets		6,571		5,071
Deferred income taxes		2,335		1,871
Total current assets		92,522		95,305
PROPERTY, PLANT AND EQUIPMENT, at Cost
Land		1,194		991
Buildings and improvements		21,406		20,670
Machinery, equipment and furniture		31,382		31,945
Construction in progress		5,946		1,320
Subtotal		59,928		54,926
Less: accumulated depreciation and amortization		33,472		33,689
Net property, plant and equipment		26,456		21,237
OTHER ASSETS
Goodwill		23,443		23,302
Other intangible assets, net		11,632		13,327
Restricted cash		1,000		1,000
Deferred illumigene contract costs		2,643		231
Other assets		255		239
Total other assets		38,973		38,099
TOTAL ASSETS	$	157,951	$	154,641

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 3

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(dollars in thousands)

LIABILITIES AND SHAREHOLDERS’ EQUITY

	June 30,		September 30,
	2011		2010
CURRENT LIABILITIES
Accounts payable	$	6,093	$	4,466
Accrued employee compensation costs		4,100		3,451
Other accrued expenses		5,457		5,521
Income taxes payable		1,532		1,086
Total current liabilities		17,182		14,524
DEFERRED INCOME TAXES		2,649		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, 41,048,269 and 40,654,286 shares issued, respectively		—		—
Additional paid-in capital		97,577		94,529
Retained earnings		39,106		42,177
Accumulated other comprehensive income		1,437		655
Total shareholders’ equity		138,120		137,361
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	157,951	$	154,641

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 4

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Changes in Shareholders’ Equity (Unaudited)

(dollars and shares in thousands)

								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		—		—		(23,192	)		—						(23,192	)
Exercise of stock options		212		1,067		—			—						1,067
Issuance of restricted shares		182		—		—			—						—
Stock compensation expense		—		1,981		—			—						1,981
Comprehensive income:
Net earnings		—		—		20,121			—		$	20,121			20,121
Foreign currency translation adjustment		—		—		—			1,203			1,203			1,203
Other comprehensive income taxes		—		—		—			(421	)		(421	)		(421	)
Comprehensive income											$	20,903
Balance at June 30, 2011		41,048	$	97,577	$	39,106		$	1,437					$	138,120

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 5

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Dollars in Thousands, Except Per Share Amounts
(Unaudited)

1. Basis of Presentation

The interim condensed consolidated financial statements are unaudited and are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, and the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of Management, the interim financial statements include all normal adjustments and disclosures necessary to present fairly the Company’s financial position as of June 30, 2011, the results of its operations for the three and nine month periods ended June 30, 2011 and 2010, and its cash flows for the nine month periods ended June 30, 2011 and 2010. These statements should be read in conjunction with the financial statements and footnotes thereto included in the Company’s fiscal 2010 Annual Report on Form 10-K. Financial information as of September 30, 2010 has been derived from the Company’s audited consolidated financial statements.

The results of operations for interim periods are not necessarily indicative of the results to be expected for the year.

2. Significant Accounting Policies

(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 data provided by these customers, estimates of inventories of our products held by these customers, historical statistics, current trends, and other factors. Changes to the accruals are recorded in the period that they become known. Our rebate accruals were $4,272 at June 30, 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 based on kit sales. Costs for the reader instruments 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.

Page 6

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.

(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.

Comprehensive income for the interim periods was as follows:

	Three Months						Nine Months
	Ended June 30,						Ended June 30,
	2011			2010			2011			2010
Net earnings	$	6,836		$	6,424		$	20,121		$	21,325
Foreign currency translation adjustment		335			(1,287	)		1,203			(2,429	)
Income taxes		(117	)		451			(421	)		850
Comprehensive income	$	7,054		$	5,588		$	20,903		$	19,746

(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 year’s 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:

	June 30, 2011				September 30, 2010
	Cash and				Cash and
	Equivalents		Other		Equivalents		Other
Taxable investments -
Overnight repurchase agreements	$	11,332	$	—	$	14,862	$	—
Money market funds		—		—		10,249		—
Cash on hand -
Restricted		—		1,000		—		1,000
Unrestricted		14,231		—		12,768		—
Total	$	25,563	$	1,000	$	37,879	$	1,000

(f) Recent Accounting Pronouncements —

In May 2011, FASB issued Accounting Standards Update (ASU) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. FASB ASU No. 2011-04 amends and clarifies the measurement and disclosure requirements of FASB ASC 820, resulting in common requirements for measuring fair value and for disclosing information about fair value measurements, clarification of how to apply existing fair value measurement and disclosure requirements, and changes to certain principles and requirements for measuring fair value and disclosing information about fair value measurements. The new requirements are effective for fiscal years beginning after December 15, 2011. The Company plans to adopt this amended guidance on October 1, 2012 and at this time does not anticipate that it will have a material impact on the Company’s consolidated results of operations, cash flows or financial position.

In June 2011, FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, which amends the disclosure and presentation requirements of Comprehensive Income. Specifically, FASB ASU No. 2011-05 requires that all nonowner changes in shareholders’ equity be presented either in 1) a single continuous statement of comprehensive income or 2) two separate but consecutive statements, in which the first statement presents total net income and its components, and the second statement presents total other comprehensive income and its components. These new presentation requirements are effective for the Company beginning October 1, 2012, with early adoption permitted. The Company will proceed with evaluating the presentation alternatives provided within FASB ASU No. 2011-05, as well as the permitted dates of adoption, and determine the most appropriate changes to be made to the current presentation of comprehensive income within its Statement of Changes in Shareholders’ Equity and when to make such changes.

(g) 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.

3. Acquisition of Bioline Group

On July 20, 2010, we acquired all of the outstanding common stock of the Bioline group of companies (collectively the “Bioline Group”). We paid $23,849 from cash and equivalents on hand to acquire the Bioline Group. Headquartered in London, England, the Bioline Group is a leading manufacturer and distributor of molecular biology reagents with additional operations in Germany, Australia and the United States. The highly specialized molecular biology reagents it supplies to the life science research, biotech, pharmaceutical and commercial diagnostics markets are the critical components used in PCR testing for DNA, RNA and other genomic testing.

Page 8

As a result of the consideration paid exceeding the fair value of the net assets being acquired, goodwill in the amount of $12,992 was recorded in connection with this acquisition, none of which will be deductible for tax purposes. This goodwill results largely from the addition of key global operations and direct sales capabilities, management talent and a research-oriented customer base, to complement our existing Life Science operations. In addition to the Bioline Group’s results of operations, which are included in our Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2011 and reported as part of the Life Science operating segment, the consolidated results for the three and nine months ended June 30, 2011 also include:

i)	$0 and $587 of Cost of Sales for the three and nine months, respectively, related to the roll-out of fair value inventory adjustments for sales of products that were in the Bioline Group’s inventory on the date of acquisition and, therefore, were valued at fair value, rather than manufactured cost, in the opening balance sheet; and
ii)	$260 and $767 of General and Administrative Expenses for the three and nine 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.

The results of the Bioline Group included in the consolidated results of the Company for the three and nine months ended June 30, 2011 are as follows, reflecting the items noted above and adjustments to the Group’s income tax provision during the three months ended June 30, 2011:

	Three			Nine
	Months			Months
	Ended			Ended
	June 30, 2011			June 30, 2011
Net Sales	$	3,905		$	10,966
Operating Income (Loss)	$	83		$	(91	)
Net (Loss) Earnings	$	(31	)	$	28

The recognized amounts of identifiable assets acquired and liabilities assumed in the acquisition of the Bioline Group are as follows:

	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		(174	)		12,992
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		(195	)		29,507
Fair value of liabilities assumed -
Accounts payable and accrued expenses		2,817		364			3,181
Deferred income tax liabilities		3,036		(559	)		2,477
Total consideration paid	$	23,849	$	—		$	23,849

Page 9

As of June 30, 2011, the purchase price allocation related to the acquisition of the Bioline Group has been finalized and is reflected in the above fair values of the assets acquired and liabilities assumed. These fair values are based on the information that was available as of the acquisition date and the subsequent filing of this Form 10-Q and are reflected in the accompanying Condensed Consolidated Balance Sheets, including retrospective adjustment of the September 30, 2010 Condensed Consolidated Balance Sheet.

The consolidated pro forma results of the combined entities of Meridian and the Bioline Group, had the acquisition date been October 1, 2009, are as follows for the periods indicated:

	Three Months				Nine Months
	Ended June 30,				Ended June 30,
	2011		2010		2011		2010
Net Sales	$	40,052	$	37,361	$	118,374	$	117,208
Net Earnings	$	6,857	$	7,201	$	20,565	$	20,757
Diluted Earnings Per Common Share	$	0.17	$	0.17	$	0.50	$	0.50

These pro forma amounts have been calculated after adjusting the results of the Bioline Group to reflect the transaction costs incurred by the Company and the additional amortization that would have been charged assuming the previously-discussed fair value adjustments to inventory and identifiable intangible assets had been applied on October 1, 2009, together with the consequential tax effects. Fiscal 2011 pro forma earnings exclude $21 and $444 for the three and nine month periods, respectively, related to amortization of the fair value adjustments to inventory and identifiable intangible assets and the related tax effects, as these amounts have been included in the fiscal 2010 pro forma earnings.

4. Inventories

Inventories are comprised of the following:

	June 30,			September 30,
	2011			2010
Raw materials	$	6,821		$	6,221
Work-in-process		7,655			6,784
Finished goods — illumigene instruments		3,556			455
Finished goods — kits and other		17,443			16,090
Gross inventory		35,475			29,550
Less: Reserves		(1,409	)		(1,130	)
Net inventory	$	34,066		$	28,420

5. Major Customers and Segment Information

Meridian was formed in 1976 and functions as a fully-integrated research, development, manufacturing, marketing and sales organization with primary emphasis in the field of life science. Our principal businesses are (i) the development, manufacture and distribution of diagnostic test kits primarily for gastrointestinal, viral, respiratory and parasitic infectious diseases; (ii) the manufacture and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells and bioresearch reagents used by researchers and other diagnostic manufacturers; and (iii) the contract development and manufacture of proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.

Our reportable operating segments are U.S. Diagnostics, European Diagnostics and Life Science. The U.S. Diagnostics operating segment consists of manufacturing operations in Cincinnati, Ohio, and the sale and distribution of diagnostic test kits in the U.S. and countries outside of Europe, Africa and the Middle East. The European Diagnostics operating segment consists of the sale and distribution of diagnostic test kits in Europe, Africa and the Middle East. The Life Science operating segment consists of manufacturing operations in Memphis, Tennessee; Saco, Maine; Boca Raton, Florida; London, England; Luckenwalde, Germany; and Sydney, Australia, and the sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells and bioresearch reagents domestically and abroad. The Life Science operating segment also includes the contract development and manufacture of cGMP clinical grade proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.

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Two distributor customers accounted for 47% and 52% of the U.S. Diagnostics operating segment third-party sales during the three months ended June 30, 2011 and 2010, respectively, and 50% and 58% during the nine months ended June 30, 2011 and 2010, respectively. This lower percentage of sales reflects the fact that the majority of our illumigene^® product sales are direct, as well as the comparative decline in the distributors’ inventory stocking of influenza and other products. Three customers accounted for 17% and 29% of the Life Science operating segment third-party sales during the three months ended June 30, 2011 and 2010, respectively, and 18% and 33% during the nine months ended June 30, 2011 and 2010, respectively, primarily reflecting the addition of the Bioline Group.

Segment information for the interim periods is as follows:

	U.S.		European		Life
	Diagnostics		Diagnostics		Science		Eliminations(1)			Total
Three Months Ended June 30, 2011
Net sales -
Third-party	$	23,829	$	6,612	$	9,611	$	—		$	40,052
Inter-segment		2,875		9		141		(3,025	)		—
Operating income		8,399		978		797		(43	)		10,131
Goodwill (June 30, 2011)		1,381		—		22,062		—			23,443
Other intangible assets, net (June 30, 2011)		1,741		—		9,891		—			11,632
Total assets (June 30, 2011)		71,831		20,680		94,164		(28,724	)		157,951
Three Months Ended June 30, 2010
Net sales -
Third-party	$	21,121	$	6,218	$	6,518	$	—		$	33,857
Inter-segment		2,723		8		177		(2,908	)		—
Operating income		8,104		726		752		194			9,776
Goodwill (September 30, 2010)		1,381		—		21,921		—			23,302
Other intangible assets, net (September 30, 2010)		2,283		9		11,035		—			13,327
Total assets (September 30, 2010)		72,030		18,044		90,388		(25,821	)		154,641
Nine Months Ended June 30, 2011
Net sales -
Third-party	$	72,007	$	18,926	$	27,441	$	—		$	118,374
Inter-segment		7,938		16		459		(8,413	)		—
Operating income		26,780		1,781		1,499		123			30,183
Nine Months Ended June 30, 2010
Net sales -
Third-party	$	70,018	$	19,103	$	18,340	$	—		$	107,461
Inter-segment		8,200		12		438		(8,650	)		—
Operating income		26,805		2,789		2,976		87			32,657

(1) Eliminations consist of inter-segment transactions.

Transactions between operating segments are accounted for at established intercompany prices for internal and management purposes, with all intercompany amounts eliminated in consolidation.

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6. Intangible Assets

A summary of our acquired intangible assets subject to amortization, as of June 30, 2011 and September 30, 2010 is as follows:

	June 30, 2011				September 30, 2010
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Value		Amortization		Value		Amortization
Manufacturing technologies, core products and cell lines	$	11,664	$	8,360	$	11,644	$	7,693
Trademarks, licenses and patents		3,654		1,329		3,547		997
Customer lists and supply agreements		12,322		6,330		12,537		5,816
Non-compete agreements		128		117		126		21
	$	27,768	$	16,136	$	27,854	$	14,527

The actual aggregate amortization expense for these intangible assets was $570 and $345 for the three months ended June 30, 2011 and 2010, respectively, and $1,796 and $1,079 for the nine months ended June 30, 2011 and 2010, respectively. The estimated aggregate amortization expense for these intangible assets for each of the fiscal years through fiscal 2015 is as follows: fiscal 2011 — $2,336, fiscal 2012 — $2,079, fiscal 2013 — $2,078, fiscal 2014 — $1,641 and fiscal 2015 — $1,392.

7. Fair Value Measurements

We use fair value measurements to value our financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three broad levels, which are described below:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date for assets and liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly. These include quoted prices for identical or similar assets or liabilities in markets that are not active, that is, markets in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers, or in which little information is released publicly and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3: Unobservable inputs, developed using our estimates and assumptions, which reflect those that the market participants would use. Such inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

Determining where an asset or liability falls within the hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and we consider counterparty credit risk in the assessment of fair value.

We had no financial assets or liabilities carried at fair value at June 30, 2011 to be classified as Level 1, 2 or 3. As of September 30, 2010, financial assets and liabilities to be so classified were comprised solely of money market funds totaling $10,249 classified as Level 1, with no financial assets or liabilities classified as Level 2 or Level 3.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Refer to “Forward Looking Statements” following the Index in front of this Form 10-Q. In the discussion that follows, all amounts are in thousands (both tables and text), except per share data and percentages.

Following is a discussion and analysis of the financial statements and other statistical data that management believes will enhance the understanding of Meridian’s financial condition and results of operations. This discussion should be read in conjunction with the financial statements and notes thereto beginning on page 1.

Results of Operations

Three Months Ended June 30, 2011

Net earnings for the third quarter of fiscal 2011 increased 6% to $6,836, or $0.17 per diluted share, from net earnings for the third quarter of fiscal 2010 of $6,424, or $0.16 per diluted share. This increase reflects the combined effects of both increased sales and increased operating expenses, resulting primarily from the inclusion of the Bioline Group, which was acquired in July 2010. Consolidated sales increased 18% to $40,052 for the third quarter of fiscal 2011 compared to the same period of the prior year, reflecting the impact of Bioline Group sales and increases in sales across all four of our diagnostic focus product families: C. difficile, Foodborne, H. pylori and Upper Respiratory.

Sales for the U.S. Diagnostics operating segment for the third quarter of fiscal 2011 increased 13% compared to the third quarter of fiscal 2010, reflecting growth across all four of our focus product families — ranging from 8% growth in our H. pylori products to 26% growth in our foodborne products. Third quarter 2011 sales for our European Diagnostics operating segment increased 6% compared to the third quarter of fiscal 2010 due primarily to a positive currency effect. As a result of the Bioline Group acquisition, our Life Science segment experienced a 47% increase in sales during this period. Excluding the effect of the Bioline Group, sales of our core Life Science operating segment decreased by 12% during the third quarter of fiscal 2011 compared to the third quarter of fiscal 2010, as this business continues to experience both pricing pressure and reduced order volumes in bulk antigens, antibodies and reagents. We expect core Life Science revenues to be flat to down single digits for fiscal 2012 as our large diagnostic manufacturing customers exert pricing pressures throughout their supply chains and certain segments of the diagnostics industry migrate to molecular technologies.

Nine Months Ended June 30, 2011

For the nine month period ended June 30, 2011, net earnings decreased 6% to $20,121, or $0.49 per diluted share, from net earnings for the comparable fiscal 2010 period of $21,325, or $0.52 per diluted share. This decrease reflects the impact of the increase in total sales being more than offset by the increase in operating expenses that resulted primarily from the inclusion of expenses from the Bioline Group, acquired in July 2010, as well as costs related to the reorganization of our European and global sales and marketing leadership during the second quarter of fiscal 2011. Consolidated sales increased 10% to $118,374 for the first nine months of fiscal 2011 compared to the same period of the prior fiscal year. This increase primarily results from the impact of Bioline Group sales and strong growth in foodborne and H. pylori product sales being partially offset by a 32% decrease in respiratory product sales and a decline in sales of our core Life Science operating segment.

For the nine month period ended June 30, 2011, the Bioline Group has contributed nearly $11,000 in sales, with a slight operating loss from the effects of selling through acquisition date inventory. The Bioline Group has contributed positive operating income for each of the past two fiscal quarters.

During the first nine months of fiscal 2011, sales for the U.S. Diagnostics operating segment increased 3% from the comparable fiscal 2010 period. This modest increase reflects sales growth in our C. difficile, foodborne and H. pylori product families being significantly offset by the decrease in respiratory product sales, which resulted from the dramatic impact on the fiscal 2010 first quarter of the novel A (H1N1) influenza outbreak and the abrupt halt of the outbreak in December 2009. Sales of our European Diagnostics operating segment for the first nine months of fiscal 2011 decreased 1% compared to the first nine months of fiscal 2010 largely due to decreased sales in the C. difficile and respiratory product families. As a result of the Bioline Group acquisition, our Life Science segment experienced a 50% increase in sales during this period. Excluding the effect of the Bioline Group, sales of our core Life Science operating segment decreased by 10% during the first nine months of fiscal 2011 compared to the first nine months of fiscal 2010, as this business continues to experience both pricing pressure and reduced order volumes in several key product lines.

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Non-GAAP Information

The tables below provide information on net earnings, basic earnings per share and diluted earnings per share, excluding the effect of costs associated with reorganizing our European and Global Sales & Marketing Leadership, each of which is a non-GAAP financial measure, as well as reconciliations to amounts reported under U.S. Generally Accepted Accounting Principles. We believe that this information is useful to those who read our financial statements and evaluate our operating results because:

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.

	Nine Months
	Ended June 30,
	2011
Net Earnings -
U.S. GAAP basis	$	20,121
European and Global Sales & Marketing Leadership Reorganization costs, inclusive of the income tax effect (1)		872
Adjusted earnings	$	20,993
Net Earnings per Basic Common Share -
U.S. GAAP basis	$	0.49
European and Global Sales & Marketing Leadership Reorganization costs, inclusive of the income tax effect (1)		0.02
Adjusted Basic EPS (2)	$	0.52
Net Earnings per Diluted Common Share -
U.S. GAAP basis	$	0.49
European and Global Sales & Marketing Leadership Reorganization costs, inclusive of the income tax effect (1)		0.02
Adjusted Diluted EPS	$	0.51

(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.
(2)	Net Earnings per Basic Common Share for the nine months ended June 30, 2011 does not sum to the total due to rounding.

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Revenue Overview

Our Diagnostics operating segments provide the largest share of our consolidated revenues, 76% and 81% for the third quarters of fiscal 2011 and 2010, respectively, and 77% and 83% for the first nine months of fiscal 2011 and 2010, respectively. The percentage declines in both the quarterly and fiscal year-to-date periods result primarily from the addition of the Bioline Group to our Life Science operating segment and, in the case of year-to-date comparisons, the impact of the novel A (H1N1) influenza outbreak in 2010. Sales from our four focus families (C. difficile, Foodborne, H. pylori and Upper Respiratory) comprised 71% and 69% of our Diagnostics operating segments’ revenues during the third quarters of fiscal 2011 and 2010, respectively, and 71% and 73% for the nine month periods ended June 30, 2011 and 2010, respectively.

Overall revenue change for the fiscal 2011 third quarter for both of our Diagnostics operating segments combined was an increase of 11%, reflecting growth across all four of our focus product families. The levels of growth in the focus products ranged from 7% in our H. pylori products, to 28% growth in our foodborne products. On an organic basis, which excludes the effects of currency translation, sales for our European Diagnostics operating segment decreased by 6% during the third quarter, reflecting the combined effects of decreases in our C. difficile, upper respiratory and H. pylori product families, partially offset by growth in our foodborne product sales.

For the first nine months of fiscal 2011, revenue for both of our Diagnostics operating segments combined increased 2% from the comparable fiscal 2010 period. This slight increase primarily results from sales growth in our C. difficile, H. pylori and foodborne product families being significantly offset by the effects on our respiratory product sales of a relatively mild worldwide flu season in the first quarter of fiscal 2011 compared to the fiscal 2010 first quarter, including the dramatic effects on the prior year of the world-wide outbreak of novel A (H1N1) influenza. Excluding the effects of currency translation, our European Diagnostics operating segment’s sales during the nine months ended June 30, 2011 decreased 2% relative to the comparable fiscal 2010 period, reflecting the combined effects of decreases in our C. difficile, upper respiratory and H. pylori product families, partially offset by growth in our foodborne product sales.

C. difficile Products

During the third quarter of fiscal 2010, we launched our illumigene^® molecular C. difficile product in non-U.S. markets, with launch of the product into U.S. markets following in the fourth quarter of fiscal 2010, upon receiving FDA clearance. As a result, we have nearly 500 placements of illumigene^® units worldwide to date, with approximately 90% installed in the U.S. Of the total units placed worldwide, we estimate that more than 450 will be used for reporting of clinical results, with the balance being used for evaluations and third party studies. At the present time, it takes a customer 90 days, on average, from purchase order placement to begin routine test usage. We are working to reduce that time frame. We expect sales of the product, which totaled approximately $2,800 and $5,600 in the three and nine months ended June 30, 2011, respectively, to continue to grow significantly throughout the balance of fiscal 2011 and during fiscal 2012, although no assurances can be made in this regard.

As a result of competitive pressures in this disease family over the last several years from new competitive products, including molecular assays, in recent previous periods we have experienced extremely slow growth in the sales of our C. difficile products. However, due to the introduction of our illumigene^® molecular C. difficile product and its growing market acceptance, we have begun to see a marked improvement over the recent periods. Sales of our C. difficile product grew 13% for all of our Diagnostics operating segments during the third quarter of fiscal 2011 and 5% for the first nine months of fiscal 2011.

With the launch of our molecular product and recent FDA clearance and submission activities related to our common antigen C. difficile products — Premier C. difficile GDH received FDA clearance in May, and ImmuoCard C. difficile GDH was submitted to the FDA in mid-July — we believe we are in a unique position to offer a full line of testing solutions to our clinical laboratory customers around the world to counter the competitive pressures surrounding this market. Additionally, we hold the only FDA-approved claim for C. difficile testing in the pediatric population. During July, we submitted to the FDA our second molecular test for the illumigene^® molecular platform, illumigene^® Group B Streptococcus (GBS), and over the next 12 months, we expect two additional tests for the platform — tests for Group A Streptococcus and Mycoplasma pneumoniae — to clear formal clinical trials and be submitted to the FDA for marketing clearance.

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Foodborne Products

Increased demand for our foodborne illness testing products throughout the first nine months of fiscal 2011 resulted in our U.S. Diagnostics operating segment experiencing sales increases for these products totaling 26% and 40% for the three and nine month periods ended June 30, 2011, respectively. During these same periods, our European Diagnostics operating segment experienced sales increases of approximately 60% and 43%, respectively, on an organic basis, reflecting the effects of the Enterohemorrhagic E. coli (EHEC) infection outbreak in Europe during the quarter.

H. pylori Products

During the third quarter of fiscal 2011, sales of our H. pylori products grew 8% for our U.S. Diagnostics operating segment; 14% during the nine month fiscal year-to-date period. This increase continues to reflect the benefits of our partnerships with managed care companies in promoting the health and economic benefits of a test and treat strategy, and the ongoing effects of such strategy moving physician behavior away from serology-based testing toward direct antigen testing. Due to significant competitive pressures related to these products on the international front, sales of H. pylori products for our European Diagnostics operating segment declined 7% on an organic basis for the fiscal 2011 third quarter, compared to the third quarter of fiscal 2010, and declined 2% during the year-over-year nine month periods ended June 30.

Upper Respiratory Products

During the three and nine month periods ended June 30, 2011, upper respiratory product sales for our Diagnostics operating segments increased 8% and decreased 32%, respectively, relative to the comparable fiscal 2010 periods. The sales decrease in the comparable year-to-date periods is a direct result of influenza test kit sales; in particular the abrupt halt, in December 2009, of the outbreak of the novel A (H1N1) influenza virus that began to spread across the northern hemisphere during the second half of fiscal 2009. The outbreak also created an increased interest in influenza testing in European markets where rapid testing has not been traditionally performed and resulted in significant sales activity for these products during the fiscal 2010 first quarter. However, similar to U.S. markets, these sales levels were not repeated in fiscal 2011, as evidenced by the approximate 13% decline in this operating segment’s upper respiratory product sales on an organic basis (excluding effects of currency translation) compared to the first nine months of fiscal 2010.

Group Purchasing Organizations

In our U.S. Diagnostics operating segment, consolidation of the U.S. healthcare industry over the last several years has led to the creation of group purchasing organizations (GPOs) that aggregate buying power for hospital groups and put pressure on our selling prices. We have multi-year supply agreements with several GPOs. During the third quarter and first nine months of fiscal 2011, we have experienced approximately $200 and $1,000, respectively, in unfavorable price variance, as a result of these agreements. However, these agreements help secure our products with these customers and have led to new business. While in the near term this has negatively impacted gross profit, further increases in volumes are expected from these contracts.

Foreign Currency

Sales for our European Diagnostics operating segment included the effect of more favorable currency rates, which led to currency translation gains in the amount of approximately $650 for the third quarter of fiscal 2011, compared to $350 of currency translation losses in the fiscal 2010 third quarter. During the first nine months of fiscal 2011, translation gains of approximately $165 were experienced, compared to $550 of currency translation gains during the comparable prior year period.

Life Science Operating Segment

Sales for our Life Science operating segment increased 47% for the third quarter of fiscal 2011 and 50% for the nine month fiscal year-to-date period, due primarily to the revenue contribution of the Bioline Group acquired in July 2010. Excluding the impact of the Bioline Group, sales for the operating segment declined 12% and 10% during the three and nine month periods, respectively, as this business continues to experience both pricing pressure and reduced order volumes in several key product lines. For fiscal 2011, we expect revenues for our core Life Science business to decline 6%-8%, while the Bioline Group is expected to contribute approximately $15,000.

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Significant Customers

Two national distributors in our U.S. Diagnostics operating segment accounted for 47% and 52% of total sales for this operating segment for the third quarters of fiscal 2011 and 2010, respectively, and 50% and 58% during the nine months ended June 30, 2011 and 2010, respectively. The lower percentage of sales reflects the fact that the majority of our illumigene^® product sales are direct, as well as the comparative decline in these distributors’ inventory stocking of influenza and other products.

Three diagnostic manufacturing customers in our Life Science operating segment accounted for 17% and 29% of total sales for this operating segment for the third quarters of fiscal 2011 and 2010, respectively, and 18% and 33% during the nine months ended June 30, 2011 and 2010, respectively. The lower percentage of sales during both periods results primarily from the addition of the Bioline Group.

Operating Segment Revenues

Our reportable operating segments are U.S. Diagnostics, European Diagnostics and Life Science. The U.S. Diagnostics operating segment consists of manufacturing operations in Cincinnati, Ohio, and the sale and distribution of diagnostic test kits in the U.S. and countries outside of Europe, Africa and the Middle East. The European Diagnostics operating segment consists of the sale and distribution of diagnostic test kits in Europe, Africa and the Middle East. The Life Science operating segment consists of manufacturing operations in Memphis, Tennessee; Saco, Maine; Boca Raton, Florida; London, England; Luckenwalde, Germany; and Sydney, Australia and the sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells and bioresearch reagents domestically and abroad. The Life Science operating segment also includes the contract development and manufacture of proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.

Revenues for the Diagnostics operating segments, in the normal course of business, may be affected from quarter to quarter by buying patterns of major distributors, seasonality and strength of certain diseases and foreign currency exchange rates. Revenues for the Life Science operating segment, in the normal course of business, may be affected from quarter to quarter by the timing and nature of arrangements for contract services work, which may have longer production cycles than bioresearch reagents and bulk antigens and antibodies, as well as buying patterns of major customers. We believe that the overall breadth of our product lines serves to reduce the variability in consolidated revenues.

The Company has experienced no material adverse impact on revenue as a result of the disaster in Japan earlier this year, nor is any material adverse impact anticipated at this time, although no assurances can be given with regard to material adverse impacts that may arise in the future despite being unanticipated as of the date of this report. In addition, the Company’s supply of product and product components has not been and is not expected to be adversely impacted by the disaster.

Revenues for each of our operating segments are shown below.

	Three Months Ended June 30,									Nine Months Ended June 30,
	2011			2010			Inc (Dec)			2011			2010			Inc (Dec)
U.S. Diagnostics	$	23,829		$	21,121			13	%	$	72,007		$	70,018			3	%
European Diagnostics		6,612			6,218			6	%		18,926			19,103			(1	)%
Life Science		9,611			6,518			47	%		27,441			18,340			50	%
Consolidated	$	40,052		$	33,857			18	%	$	118,374		$	107,461			10	%
International -
U.S. Diagnostics	$	1,845		$	1,401			32	%	$	5,058		$	4,378			16	%
European Diagnostics		6,612			6,218			6	%		18,926			19,103			(1	)%
Life Science		5,365			3,085			74	%		15,238			8,337			83	%
Total	$	13,822		$	10,704			29	%	$	39,222		$	31,818			23	%
% of total sales		35	%		32	%					33	%		30	%

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Gross Profit

	Three Months Ended June 30,									Nine Months Ended June 30,
	2011			2010			Change			2011			2010			Change
Gross Profit	$	25,426		$	21,736			17	%	$	75,328		$	67,388			12	%
Gross Profit Margin		63	%		64	%	-1 point				64	%		63	%	+1 point

Gross profit margin improvement for the first nine months of fiscal 2011 results primarily from the combined effects of 1) the margin contribution of Bioline Group products in fiscal 2011; 2) continued operating efficiencies in our Cincinnati, Ohio diagnostic test manufacturing facility; and 3) the year-over-year decline in upper respiratory product sales. Our upper respiratory product family generally has a lower gross profit margin than our other focus product families (C. difficile, H. pylori and foodborne). Sales of upper respiratory products during the first nine months of fiscal 2011 were approximately 11% of our consolidated sales, compared to 18% of consolidated sales for the comparable fiscal 2010 period. Specifically, sales of the Company’s influenza products represented approximately 2% of consolidated sales during the nine months ended June 30, 2011, compared to approximately 8% in the first nine months of fiscal 2010.

Our overall operations consist of the sale of diagnostic test kits for various disease states and in alternative test formats, as well as bioresearch reagents, bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells, proficiency panels, contract research and development, and contract manufacturing services. Product sales mix shifts, in the normal course of business, can cause the consolidated gross profit margin to fluctuate by several points.

Operating Expenses

	Three Months Ended June 30, 2011
	Research &			Selling &			General &						Total Operating
	Development			Marketing			Administrative			Other (1)			Expenses
2010 Expenses	$	2,128		$	4,287		$	4,872		$	673		$	11,960
% of Sales		6	%		13	%		14	%		2	%		35	%
Fiscal 2011 Increases (Decreases):
U.S. Diagnostics		521			754			(15	)		—			1,260
European Diagnostics		—			87			(27	)		—			60
Life Science
- Bioline Group		173			1,037			1,817			—			3,027
- Core		(112	)		(22	)		(205	)		—			(339	)
- Transaction Costs		—			—			—			(673	)		(673	)
2011 Expenses	$	2,710		$	6,143		$	6,442		$	—		$	15,295
% of Sales		7	%		15	%		16	%		—	%		38	%
% Increase (Decrease)		27	%		43	%		32	%		(100	)%		28	%

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Operating Expenses

	Nine Months Ended June 30, 2011
	Research &			Selling &			General &						Total Operating
	Development			Marketing			Administrative			Other (1)			Expenses
2010 Expenses	$	6,521		$	13,495		$	14,042		$	673		$	34,731
% of Sales		6	%		13	%		13	%		1	%		32	%
Fiscal 2011 Increases (Decreases):
U.S. Diagnostics		343			1,612			326			365			2,646
European Diagnostics		—			20			(115	)		875			780
Life Science
- Bioline Group		527			2,772			4,484			—			7,783
- Core		(8	)		(52	)		(62	)		—			(122	)
- Transaction Costs		—			—			—			(673	)		(673	)
2011 Expenses	$	7,383		$	17,847		$	18,675		$	1,240		$	45,145
% of Sales		6	%		15	%		16	%		1	%		38	%
% Increase		13	%		32	%		33	%		84	%		30	%

(1) Comprised of transaction costs for our acquisition of the Bioline Group (2010) and costs related to reorganizing our European and Global Sales & Marketing Leadership (2011).

We continue to closely control spending for each of our operating segments.

The quarterly and year-to-date increases in all three ongoing operating expense categories (i.e., Research & Development, Selling & Marketing, and General & Administrative) of approximately $4,000 and $9,800, respectively, result in large part from the addition of the Bioline Group’s operating expenses. Additionally, operating expenses for the U.S. Diagnostics operating segment reflect the effects of the following:

Research & Development

Increased personnel-related costs of approximately $200 and $300 for the quarterly and nine month year-to-date periods, respectively, in line with the overall increase in spending on new product development.

Selling & Marketing

1)	Increased sales bonus and commissions expense of approximately $300 and $600 for the quarterly and nine month year-to-date periods, respectively, due to the illumigene® launch and sales growth;
2)	Increased samples and promotional expense of approximately $300 for the nine month year-to-date period, resulting in large part from efforts during the second quarter to move flu inventory manufactured by third parties prior to its expiration; and
3)	Increased travel and trade show expenses during the quarterly and nine month year-to-date periods of approximately $345 and $640, respectively, due in large part to the illumigene® launch costs.

General & Administrative

The positive effects of overall cost containment and reduction efforts being dramatically impacted by approximately $850 of stock-based compensation expense during the nine month year-to-date period — approximately $400 of which related to restricted stock grants during the fiscal 2011 first quarter, and an approximate $450 impact on the fiscal 2011 third quarter related to retirement eligible employees.

Page 19

During the second quarter of fiscal 2011, the Company incurred approximately $1,240 of costs in connection with the reorganization of our European and Global Sales and Marketing Leadership. Approximately 75% of these costs related to severance benefits for the former President and Managing Director of our European diagnostics business, with no further such costs anticipated at this time.

Operating Income

Operating income increased 4% to $10,131 for the third quarter of fiscal 2011, and decreased 8% to $30,183 for the first nine months of fiscal 2011, as a result of the factors discussed above.

Other Income and Expense

The increase in other income, net, during the nine month year-to-date period can primarily be attributed to the addition of the Bioline Group, as it contributed to an improvement in net currency exchange gains/losses of approximately $100 and grant income from a foreign governmental agency of approximately $200.

Income Taxes

The effective rate for income taxes was 33% for the third quarter and 34% for the first nine months of fiscal 2011, each of which is one percentage point lower than the corresponding periods of fiscal 2010. This decrease in rates primarily results from the fiscal 2011 third quarter release of reserves for certain uncertain tax positions due to the passage of the relevant statute of limitations. For the fiscal year ending September 30, 2011, we expect the effective tax rate to approximate 35%.

Liquidity and Capital Resources

Comparative Cash Flow Analysis

Our cash flow and financing requirements are determined by analyses of operating and capital spending budgets, consideration of acquisition plans, and consideration of common share dividends. We have historically maintained a credit facility to augment working capital requirements and to respond quickly to acquisition opportunities. Our investment portfolio presently contains overnight repurchase agreements. We used $23,849 from our investment portfolio to complete the acquisition of the Bioline Group during July 2010.

We have an investment policy that guides the holdings of our investment portfolio. Our objectives in managing the investment portfolio are to (i) preserve capital; (ii) provide sufficient liquidity to meet working capital requirements and fund strategic objectives such as acquisitions; and (iii) capture a market rate of return commensurate with market conditions and our policy’s investment eligibility criteria. As we look forward, we will continue to manage the holdings of our investment portfolio with preservation of capital being the primary objective.

Except as otherwise described herein, we do not expect current conditions in the financial markets, or overall economic conditions to have a significant impact on our liquidity needs, financial condition, or results of operations. We intend to continue to fund our working capital requirements and dividends from current cash flows from operating activities and cash on hand. We also have an additional source of liquidity through our $30,000 bank credit facility, if needed.

Net cash provided by operating activities decreased 30% for the first nine months of fiscal 2011 to $16,618, reflecting the 6% decrease in net earnings and the effects of net working capital changes related to our investments in illumigene^® inventory, including readers, fluctuations in sales levels, and the timing of payments with suppliers. Net cash flows from operating activities and cash on hand are anticipated to be adequate to fund working capital requirements and dividends during the next 12 months. During the last six fiscal quarters, the per share amount of our cash dividend has exceeded the per share amount of our diluted earnings. As we enter fiscal 2012, management expects that this relationship will change; meaning the per share amount of our diluted earnings will exceed the per share amount of our current cash dividend, although no assurances can be made in this regard.

Page 20

Capital Resources

We have a $30,000 credit facility with a commercial bank which expires on September 15, 2012. As of July 31, 2011, there were no borrowings outstanding on this facility and we had 100% borrowing capacity available to us. We have had no borrowings outstanding under this facility during the first nine months of fiscal 2011, or during the full year of fiscal 2010.

Our capital expenditures for the balance of fiscal 2011 are estimated to be approximately $1,700. Such expenditures may be funded with cash and cash equivalents on hand, operating cash flows, and/or availability under the $30,000 credit facility discussed above. Capital expenditures relate to manufacturing and other equipment of a normal and recurring nature, as well as costs associated with production line automation in Cincinnati, facilities expansions in Cincinnati and Memphis, and computer system and software purchases for the Bioline Group. We also expect to have approximately $1,700 in expenditures for readers to support the ongoing illumigene^® product launch.

We do not utilize any special-purpose financing vehicles or have any undisclosed off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Company’s exposure to market risk since September 30, 2010.

ITEM 4. CONTROLS AND PROCEDURES

As of June 30, 2011, an evaluation was completed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) and 15d-15(b) promulgated under the Securities Exchange Act of 1934, as amended. Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of June 30, 2011. There have been no changes in our internal control over financial reporting identified in connection with the evaluation of internal control that occurred during the third fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, or in other factors that could materially affect internal control subsequent to June 30, 2011.

Page 21

PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

There have been no material changes from risk factors as previously disclosed in the Registrant’s Form 10-K in response to Item 1A to Part I of Form 10-K.

ITEM 6. EXHIBITS

10.4*	Salary Continuation Agreement between Meridian Bioscience, Inc. and John A. Kraeutler, as amended April 24, 2001, December 29, 2008 and August 3, 2011 (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)

* Management Compensatory Arrangement

Page 22

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MERIDIAN BIOSCIENCE, INC.
Date: August 9, 2011	/s/ Melissa A. Lueke
	Melissa A. Lueke
	Executive Vice President and Chief Financial Officer

Page 23

EX-10.4

Exhibit 10.4

SALARY CONTINUATION AGREEMENT

This Salary Continuation Agreement (the “Agreement”) is dated August 3, 2011 between Meridian Bioscience, Inc., an Ohio Corporation (the “Corporation”) and John A. Kraeutler, Chief Executive Officer (“Executive”).

WITNESSETH:

WHEREAS, the Corporation and Executive wish to amend a salary continuation agreement dated January 19, 1995, and previously amended on April 24, 2001, and further amended on December 29, 2008 to be compliant with Section 409A of the Internal Revenue Code, as amended;

WHEREAS, Executive is a Specified Employee as defined in Article I below;

WHEREAS, it is the consensus of the Board of Directors that Executive’s services have been of exceptional merit, in excess of the compensation paid and an invaluable contribution to the profits and position of the Corporation in its field of activity;

WHEREAS, the Board of Directors further believes that Executive’s experience, knowledge of corporate affairs, reputation and industry contacts are of such value and his continued services so essential to Corporation’s future growth and profits that it would suffer severe financial loss should Executive terminate his services; and

WHEREAS, it is the desire of the Corporation and the Executive to enter into this Agreement under which the Corporation will agree to make certain payments to Executive upon his retirement or disability and, alternatively, to his beneficiaries in the event of his premature death while employed by the Corporation.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the Corporation and the Executive, agree as follows:

ARTICLE I. — DEFINITIONS

A. Effective Date

The effective date of this Agreement shall be January 19, 1995.

B. Retirement Date

The Retirement Date for purposes of this Agreement and assuming the Executive has reached the age of 62, shall mean the first day of the calendar month following the Executive’s seperation from service with the Corporation.

C. Severance Benefits

Severance Benefits under this Agreement shall mean those benefits to which the Executive is entitled in the event he is discharged by the Corporation without cause. Any dispute as to determination of “ cause” shall be subject to the terms of Article VI.B., “Claims Procedure”.

D. Termination of Service

Termination of Service shall mean the Corporation’s discharge of the Executive for cause.

E. Specified Employee

Specified Employee shall have the meaning defined in IRC Section 409A, as amended.

ARTICLE II. — EMPLOYMENT

A. Employment

Corporation agrees to employ Executive in such capacity as the Corporation may from time to time determine with such duties, responsibilities and compensation as determined by the Board of Directors.

Executive agrees to remain in the Corporation’s employment; to devote his full time and attention exclusively to the business of the Corporation and to use his best efforts to provide faithful and satisfactory service to the Corporation.

Employment services shall include temporary disability not to exceed three months and “leaves of absence” specifically granted Executive by the Board of Directors.

B. No Employment Agreement Created

No provision of this Agreement shall be deemed to restrict or limit any existing employment agreement by and between the Corporation and the Executive nor shall any conditions herein create specific employment rights to the Executive nor limit the right of the Corporation to discharge the Executive with or without cause. In a similar fashion, no provision shall limit the Executive’s rights to voluntarily sever his employment at any time.

ARTICLE III. — BENEFITS

The following benefits provided by the Corporation to the Executive are in the nature of a fringe benefit and shall in no event be construed to affect nor limit the Executive’s current or prospective salary increases, cash bonuses or profit-sharing distributions or credits. All benefits paid pursuant to the terms of this Agreement are subject to applicable federal, state and local withholding and income taxes.

A. Retirement Benefits

The Executive shall be entitled to receive $600,000 from the Corporation through 120 monthly payments of $5,000 each, beginning on the first day of the seventh month following the Executive’s “Retirement Date,” where the Executive shall receive in a single sum the first seven months of such payments. Thereafter, commencing on the first day of the eighth month following the Executive’s Retirement Date, the payments shall continue for a period of 113 months.

In the event that the Executive should die following his Retirement Date but before the expiration of 120 months, the unpaid balance of such monthly payments shall be commuted at 8% and paid in a single sum to the beneficiary selected by the Executive in the Beneficiary Designation Form provided by the Corporation. In the absence of or failure of the Executive to designate a beneficiary, the unpaid balance of such monthly payments shall be commuted at 8% and paid in a single sum to the Executive’s estate. For purposes of this paragraph, the single sum amount shall be paid to the beneficiary selected by the Executive, or paid to the Executive’s estate, as the case may be, on the first day of the first month following the month of death.

B. Benefits in the Event of Discharge by the Corporation Without Cause (Severance Benefits)

If Executive is discharged without cause, Executive shall be entitled to receive $5,000 monthly, for a continuous period of 120 months.

Such level of Severance Benefits shall commence on the first day of the seventh month following separation of service, whereby the Executive shall receive in a single sum the first seven months of such payments. Thereafter, commencing on the first day of the eighth month following separation of service, such level ofSeverance Benefits shall continue for a period of 113 months.

In the event that the Executive should die following such separation of service but before the expiration of the 120 months, the unpaid balance of such monthly payments shall be commuted at 8% and paid in a single sum to the beneficiary selected by the Executive in the Beneficiary Designation Form provided by the Corporation. In the absence or failure of the Executive to designate a beneficiary, the unpaid balance of such monthly payments shall be commuted at 8% and paid in a single sum to the Executive’s estate. For purposes of this paragraph, the single sum amount will be paid to the beneficiary selected by the Executive, or paid to the Executive’s estate, as the case may be, on the first day of the first month following the month of death.

C. Termination of Service for Cause

Should Executive be discharged for cause, all Executive’s benefits under this Agreement shall be forfeited and this Agreement shall become null and void. If a dispute arises as to discharge “for cause”, such dispute shall be resolved as set forth in Article VI. B.

D. Death Benefit Prior to Retirement

Should the Executive die before the Retirement Date, the Corporation agrees to pay to the Executive’s designated beneficiary in the Beneficiary Designation Form, or in the absence or failure of the Executive to designate a beneficiary, to the Executive’s estate, a single sum of $350,000 on the first day of the first month following the Executive’s death. If the provisions of Article III. B. are in effect, this provision is null and void.

ARTICLE IV. — RESTRICTIONS UPON FUNDING

Corporation shall have no obligation to set aside, earmark or entrust any fund or money with which to pay its obligations under this Agreement. The Executive, his beneficiaries or any successor in interest to him shall be and remain simply a general creditor of the Corporation in the same manner as any other creditor having a general claim for matured and unpaid compensation.

The Corporation reserves the absolute right, in its sole discretion, to either fund the obligations undertaken by this Agreement or to refrain from funding the same and to determine the extent nature, and method of such funding.

Should the Corporation elect to fund this Agreement, in whole or in part, through the purchase of life insurance, mutual funds, disability policies or annuities, the Corporation reserves the absolute right, in its sole discretion, to terminate such funding at any time, in whole or in part. At no time shall Executive be deemed to have any lien nor right, title or interest in or to any specific funding investment or to any assets of the Corporation.

If the Corporation elects to invest in a life insurance, disability or annuity policy upon the life of Executive, then Executive shall assist the Corporation by freely submitting to a physical exam and supplying such additional information necessary to obtain such insurance or annuities.

ARTICLE V. — MISCELLANEOUS

A. Alienability and Assignment Prohibition

Except to the extent provided below, neither Executive, his widow nor any other beneficiary under this Agreement shall have any power or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify or otherwise encumber in advance any of the benefits payable hereunder nor shall any of said benefits be subject to seizure for the payment of any debts, judgments, alimony or separate maintenance owed by the Executive or his beneficiary, nor be transferable by operation of law in the event of bankruptcy, insolvency or otherwise. In the event Executive or any beneficiary attempts assignment, commutation, hypothecation, transfer or disposal of the benefits hereunder, the Corporation’s liabilities shall forthwith cease and terminate. Notwithstanding the preceding prohibition, in the event Executive and his spouse divorce, the value of the benefits payable hereunder may be subject to the division for the benefit of Executive’s spouse pursuant to a divorce decree or other similar domestic relations order.

B. Binding Obligation of Corporation and Any Successor in Interest

This Agreement shall be binding upon the parties hereto, their successors, beneficiaries, heirs and personal representatives.

C. Amendment and Revocation

It is agreed by and between the parties hereto that, during the lifetime of the Executive, this Agreement may be amended or revoked at any time or times, in whole or in part, by the mutual written assent of the Executive and the Corporation. For any benefits not yet accrued pursuant to Article III. B., the Corporation shall have the sole discretion to amend or revoke this Agreement at any time or times, in whole or in part, by a written amendment. For purposes hereof, benefits shall be considered to have accrued only to the extent of the Executive’s entitlement under Article III. B. determined as if the Executive is discharged without cause as of the date of the amendment.

D. Gender

Whenever in this Agreement words are used in the masculine or neuter gender, they shall be read and construed as in the masculine, feminine or neuter gender, whenever they should so apply.

E. Effect on Other Corporation Benefit Plans

Nothing contained in this Agreement shall affect the right of the Executive to participate in or be covered by any qualified or non-qualified pension, profit sharing, group, bonus or other supplemental compensation or fringe benefit plan constituting a part of Corporation’s existing or future compensation structure.

F. Non-compete Agreement

In the event the Executive violates any non-competition and confidentiality agreement (or similar agreement) with the Corporation, determined in the sole and absolute discretion of the Plan Administrator, no further benefits shall be payable pursuant to this Agreement. This provision is in addition to any remedies the Corporation might otherwise have for such a violation and does not otherwise modify any such agreement.

G. Headings

Headings and Subheadings in this Agreement are inserted for reference and convenience only and shall not be deemed a part of this Agreement.

H. Applicable Law

The validity and interpretation of this Agreement shall be governed by the laws of the State of Ohio.

ARTICLE VI. — ERISA PROVISIONS

A. Named Fiduciary and Plan Administrator

The “Named Fiduciary and Plan Administrator” of this plan shall be the Compensation Committee of the Board of Directors of the Corporation. The Named Fiduciary and Plan Administrator shall be responsible for the management, control and administration of the Salary Continuation Agreement as established herein. The Named Fiduciary and Plan Administrator may delegate to others certain aspects of the management and operation responsibilities of the plan including the employment of advisors and the delegation of ministerial duties to qualified individuals. The Named Fiduciary and Plan Administrator shall have all powers necessary to discharge its duties under the Agreement, including the sole and absolute authority to interpret and construe the terms and provisions of this Agreement and to determine eligibility for benefits hereunder.

B. Claims Procedure

In the event that benefits under this Agreement are not paid to the Executive (or to his beneficiary in the case of the Executive’s death) and such claimants feel they are entitled to receive such benefits, then a written claim must be made to the Named Fiduciary and Plan Administrator named above within 60 days from the date payments are refused. The Named Fiduciary and Plan Administrator shall review the written claim and if the claim is denied, in whole or in part, shall provide in writing within 90 days of receipt of such claim, the specific reasons for such denial, reference to the provisions of this Agreement upon which the denial is based and any additional material or information necessary to perfect the claim. Such written notice shall further indicate the additional steps to be taken by claimants if a further review of the claim denial is desired. A claim shall be deemed denied if the Named Fiduciary and Plan Administrator fails to take any action within the aforesaid 90-day period.

If claimants desire a second review, they shall notify the Named Fiduciary and Plan Administrator in writing within 60 days of the first claim denial. Claimants may review the Agreement or any documents relating thereto and submit any written issues and comments they may feel appropriate. In its sole discretion, the Named Fiduciary and Plan Administrator shall then review the second claim and provide a written decision within 60 days of receipt of such claim. This decision shall likewise state the specific reasons for the decision and shall include reference to specific provisions of the Agreement upon which the decision is based. This decision of the Named Fiduciary and Plan Administrator shall be binding and conclusive upon all parties; and may be overturned by a court of competent jurisdiction only upon a finding that the decision was arbitrary and capricious.

IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Agreement and executed the original thereof on the 3 day of August, 2011 and that, upon execution, each has received a conforming copy.

/s/ Brenda L. Hughes WITNESS	/s/ John A. Kraeutler EXECUTIVE
/s/ Shirley Torrence WITNESS	/s/ Melissa Lueke CORPORATION

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a)

I, John A. Kraeutler, certify that:

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 registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date: August 9, 2011

/s/ John A. Kraeutler John A. Kraeutler

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a)

I, Melissa A. Lueke, certify that:

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 registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date: August 9, 2011

/s/ Melissa A. Lueke Melissa A. Lueke

Executive Vice President and Chief Financial Officer

EX-32

Meridian Bioscience, Inc.

Exhibit 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

In connection with the filing with the Securities and Exchange Commission of the Quarterly Report of Meridian Bioscience, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2011 (the “Report”), the undersigned officers of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of their knowledge:

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 John A. Kraeutler

Chief Executive Officer

August 9, 2011

/s/ Melissa A. Lueke Melissa A. Lueke

Executive Vice President and
Chief Financial Officer

August 9, 2011

XML



Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands	9 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$ 20,121	$ 21,325
Non-cash items:
Depreciation of property, plant and equipment	2,525	2,307
Amortization of intangible assets	1,796	1,079
Amortization of deferred illumigene contract costs	81
Stock-based compensation	1,981	1,255
Deferred income taxes	(1,622)	(108)
Loss on disposition of fixed assets	7	15
Unrealized loss on auction-rate securities and rights, net		10
Change in current assets	(10,176)	2,151
Change in current liabilities	2,451	(4,327)
Other, net	(546)	(6)
Net cash provided by operating activities	16,618	23,701
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment	(7,666)	(3,681)
Purchases of intangibles and other assets	(12)
Purchases of short-term investments		(1,000)
Proceeds from sales and calls of short-term investments		8,275
Net cash (used for) provided by investing activities	(7,678)	3,594
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid	(23,192)	(22,282)
Proceeds and tax benefits from exercises of stock options	1,481	559
Net cash used for financing activities	(21,711)	(21,723)
Effect of Exchange Rate Changes on Cash and Equivalents	455	(1,383)
Net (Decrease) Increase in Cash and Equivalents	(12,316)	4,189
Cash and Equivalents at Beginning of Period	37,879	54,030
Cash and Equivalents at End of Period	$ 25,563	$ 58,219

XML



Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2011	Sep. 30, 2010
CURRENT ASSETS
Cash and equivalents	$ 25,563	$ 37,879
Accounts receivable, less allowances of $125 and $241	23,987	22,064
Inventories	34,066	28,420
Prepaid expenses and other current assets	6,571	5,071
Deferred income taxes	2,335	1,871
Total current assets	92,522	95,305
PROPERTY, PLANT AND EQUIPMENT, at Cost
Land	1,194	991
Buildings and improvements	21,406	20,670
Machinery, equipment and furniture	31,382	31,945
Construction in progress	5,946	1,320
Subtotal	59,928	54,926
Less: accumulated depreciation and amortization	33,472	33,689
Net property, plant and equipment	26,456	21,237
OTHER ASSETS
Goodwill	23,443	23,302
Other intangible assets, net	11,632	13,327
Restricted cash	1,000	1,000
Deferred illumigene contract costs	2,643	231
Other assets	255	239
Total other assets	38,973	38,099
TOTAL ASSETS	157,951	154,641
CURRENT LIABILITIES
Accounts payable	6,093	4,466
Accrued employee compensation costs	4,100	3,451
Other accrued expenses	5,457	5,521
Income taxes payable	1,532	1,086
Total current liabilities	17,182	14,524
DEFERRED INCOME TAXES	2,649	2,756
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 1,000,000 shares authorized, none issued	0	0
Common shares, no par value, 71,000,000 shares authorized, 41,048,269 and 40,654,286 shares issued, respectively	0	0
Additional paid-in capital	97,577	94,529
Retained earnings	39,106	42,177
Accumulated other comprehensive income	1,437	655
Total shareholders' equity	138,120	137,361
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 157,951	$ 154,641

XML



Acquisition of Bioline Group (Details 2) (USD $) In Thousands, except Per Share data	3 Months Ended		9 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Consolidated pro forma results of the combined entities
Net Sales	$ 40,052	$ 37,361	$ 118,374	$ 117,208
Net Earnings	$ 6,857	$ 7,201	$ 20,565	$ 20,757
Diluted Earnings Per Common Share	$ 0.17	$ 0.17	$ 0.50	$ 0.50

XML



Document and Entity Information (USD $)	9 Months Ended
	Jun. 30, 2011	Jul. 31, 2011	Mar. 31, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	MERIDIAN BIOSCIENCE INC
Entity Central Index Key	0000794172
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--09-30
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 957,367,874
Entity Common Stock, Shares Outstanding		41,051,356

XML



Major Customers and Segment Information (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Sep. 30, 2010
Segment information for the interim periods
Net sales - Third-party	$ 40,052	$ 33,857	$ 118,374	$ 107,461
Operating income	10,131	9,776	30,183	32,657
Goodwill	23,443		23,443		23,302
Other intangible assets, net	11,632		11,632		13,327
Total assets	157,951		157,951		154,641
U.S. Diagnostics [Member]
Segment information for the interim periods
Net sales - Third-party	23,829	21,121	72,007	70,018
Net sales - Inter-segment	2,875	2,723	7,938	8,200
Operating income	8,399	8,104	26,780	26,805
Goodwill	1,381		1,381		1,381
Other intangible assets, net	1,741		1,741		2,283
Total assets	71,831		71,831		72,030
European Diagnostics [Member]
Segment information for the interim periods
Net sales - Third-party	6,612	6,218	18,926	19,103
Net sales - Inter-segment	9	8	16	12
Operating income	978	726	1,781	2,789
Goodwill	0		0		0
Other intangible assets, net	0		0		9
Total assets	20,680		20,680		18,044
Life Science [Member]
Segment information for the interim periods
Net sales - Third-party	9,611	6,518	27,441	18,340
Net sales - Inter-segment	141	177	459	438
Operating income	797	752	1,499	2,976
Goodwill	22,062		22,062		21,921
Other intangible assets, net	9,891		9,891		11,035
Total assets	94,164		94,164		90,388
Eliminations [Member]
Segment information for the interim periods
Net sales - Inter-segment	(3,025)	(2,908)	(8,413)	(8,650)
Operating income	(43)	194	123	87
Goodwill	0		0		0
Other intangible assets, net	0		0		0
Total assets	$ (28,724)		$ (28,724)		$ (25,821)

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Intangible Assets

9 Months Ended

Jun. 30, 2011

Intangible Assets [Abstract]

Intangible Assets

6. Intangible Assets

A summary of our acquired intangible assets subject to amortization, as of June 30, 2011 and September 30, 2010 is as follows:

	June 30, 2011				September 30, 2010
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Value		Amortization		Value		Amortization
Manufacturing technologies, core products and cell lines	$	11,664	$	8,360	$	11,644	$	7,693
Trademarks, licenses and patents		3,654		1,329		3,547		997
Customer lists and supply agreements		12,322		6,330		12,537		5,816
Non-compete agreements		128		117		126		21
	$	27,768	$	16,136	$	27,854	$	14,527

The actual aggregate amortization expense for these intangible assets was $570 and $345 for the three months ended June 30, 2011 and 2010, respectively, and $1,796 and $1,079 for the nine months ended June 30, 2011 and 2010, respectively. The estimated aggregate amortization expense for these intangible assets for each of the fiscal years through fiscal 2015 is as follows: fiscal 2011 — $2,336, fiscal 2012 — $2,079, fiscal 2013 — $2,078, fiscal 2014 — $1,641 and fiscal 2015 — $1,392.

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Major Customers and Segment Information (Details Textuals)	3 Months Ended	9 Months Ended
	Jun. 30, 2011	Jun. 30, 2011
U.S. Diagnostics [Member]
Major Customers and Segment Information (Textuals) [Abstract]
Major customer description for reportable segment	Two distributor customers accounted for 47% and 52% during the three months ended June 30, 2011 and 2010, respectively	Two distributor customers accounted for 50% and 58% during the nine months ended June 30, 2011 and 2010, respectively
Life Science [Member]
Major Customers and Segment Information (Textuals) [Abstract]
Major customer description for reportable segment	Three customers accounted for 17% and 29% during the three months ended June 30, 2011 and 2010, respectively	Three customers accounted for 18% and 33% during the nine months ended June 30, 2011 and 2010, respectively

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Inventories (Details) (USD $) In Thousands	Jun. 30, 2011	Sep. 30, 2010
Inventories
Raw materials	$ 6,821	$ 6,221
Work-in-process	7,655	6,784
Gross inventory	35,475	29,550
Less: Reserves	(1,409)	(1,130)
Net inventory	34,066	28,420
Illumigene instruments [Member]
Inventories
Finished goods	3,556	455
Kits and other [Member]
Inventories
Finished goods	$ 17,443	$ 16,090

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Inventories (Tables)	9 Months Ended
	Jun. 30, 2011
Inventories (Tables) [Abstract]
Inventories	Inventories

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Significant Accounting Policies

9 Months Ended

Jun. 30, 2011

Significant Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies

(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 data provided by these customers, estimates of inventories of our products held by these customers, historical statistics, current trends, and other factors. Changes to the accruals are recorded in the period that they become known. Our rebate accruals were $4,272 at June 30, 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 based on kit sales. Costs for the reader instruments 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.

(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.

Comprehensive income for the interim periods was as follows:

	Three Months						Nine Months
	Ended June 30,						Ended June 30,
	2011			2010			2011			2010
Net earnings	$	6,836		$	6,424		$	20,121		$	21,325
Foreign currency translation adjustment		335			(1,287	)		1,203			(2,429	)
Income taxes		(117	)		451			(421	)		850
Comprehensive income	$	7,054		$	5,588		$	20,903		$	19,746

(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 year’s 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.

(e)	Cash, Cash Equivalents and Investments —
	Our investment portfolio includes the following components:

	June 30, 2011				September 30, 2010
	Cash and				Cash and
	Equivalents		Other		Equivalents		Other
Taxable investments -
Overnight repurchase agreements	$	11,332	$	—	$	14,862	$	—
Money market funds		—		—		10,249		—
Cash on hand -
Restricted		—		1,000		—		1,000
Unrestricted		14,231		—		12,768		—
Total	$	25,563	$	1,000	$	37,879	$	1,000

(f) Recent Accounting Pronouncements —

In May 2011, FASB issued Accounting Standards Update (ASU) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. FASB ASU No. 2011-04 amends and clarifies the measurement and disclosure requirements of FASB ASC 820, resulting in common requirements for measuring fair value and for disclosing information about fair value measurements, clarification of how to apply existing fair value measurement and disclosure requirements, and changes to certain principles and requirements for measuring fair value and disclosing information about fair value measurements. The new requirements are effective for fiscal years beginning after December 15, 2011. The Company plans to adopt this amended guidance on October 1, 2012 and at this time does not anticipate that it will have a material impact on the Company’s consolidated results of operations, cash flows or financial position.

In June 2011, FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, which amends the disclosure and presentation requirements of Comprehensive Income. Specifically, FASB ASU No. 2011-05 requires that all nonowner changes in shareholders’ equity be presented either in 1) a single continuous statement of comprehensive income or 2) two separate but consecutive statements, in which the first statement presents total net income and its components, and the second statement presents total other comprehensive income and its components. These new presentation requirements are effective for the Company beginning October 1, 2012, with early adoption permitted. The Company will proceed with evaluating the presentation alternatives provided within FASB ASU No. 2011-05, as well as the permitted dates of adoption, and determine the most appropriate changes to be made to the current presentation of comprehensive income within its Statement of Changes in Shareholders’ Equity and when to make such changes.

(g) 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.

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Significant Accounting Policies (Policies)

9 Months Ended

Jun. 30, 2011

Significant Accounting Policies (Policies) [Abstract]

Revenue Recognition

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 data provided by these customers, estimates of inventories of our products held by these customers, historical statistics, current trends, and other factors. Changes to the accruals are recorded in the period that they become known. Our rebate accruals were $4,272 at June 30, 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 based on kit sales. Costs for the reader instruments 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.

Accounts Receivable

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.

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.

Comprehensive income for the interim periods was as follows:

	Three Months						Nine Months
	Ended June 30,						Ended June 30,
	2011			2010			2011			2010
Net earnings	$	6,836		$	6,424		$	20,121		$	21,325
Foreign currency translation adjustment		335			(1,287	)		1,203			(2,429	)
Income taxes		(117	)		451			(421	)		850
Comprehensive income	$	7,054		$	5,588		$	20,903		$	19,746

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 year’s 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.

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.

Recent Accounting Pronouncements

In May 2011, FASB issued Accounting Standards Update (ASU) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. FASB ASU No. 2011-04 amends and clarifies the measurement and disclosure requirements of FASB ASC 820, resulting in common requirements for measuring fair value and for disclosing information about fair value measurements, clarification of how to apply existing fair value measurement and disclosure requirements, and changes to certain principles and requirements for measuring fair value and disclosing information about fair value measurements. The new requirements are effective for fiscal years beginning after December 15, 2011. The Company plans to adopt this amended guidance on October 1, 2012 and at this time does not anticipate that it will have a material impact on the Company’s consolidated results of operations, cash flows or financial position.

In June 2011, FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, which amends the disclosure and presentation requirements of Comprehensive Income. Specifically, FASB ASU No. 2011-05 requires that all nonowner changes in shareholders’ equity be presented either in 1) a single continuous statement of comprehensive income or 2) two separate but consecutive statements, in which the first statement presents total net income and its components, and the second statement presents total other comprehensive income and its components. These new presentation requirements are effective for the Company beginning October 1, 2012, with early adoption permitted. The Company will proceed with evaluating the presentation alternatives provided within FASB ASU No. 2011-05, as well as the permitted dates of adoption, and determine the most appropriate changes to be made to the current presentation of comprehensive income within its Statement of Changes in Shareholders’ Equity and when to make such changes.

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.

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Intangible Assets (Tables)

9 Months Ended

Jun. 30, 2011

Intangible Assets (Tables) [Abstract]

Summary of acquired intangible assets subject to amortization

	June 30, 2011				September 30, 2010
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Value		Amortization		Value		Amortization
Manufacturing technologies, core products and cell lines	$	11,664	$	8,360	$	11,644	$	7,693
Trademarks, licenses and patents		3,654		1,329		3,547		997
Customer lists and supply agreements		12,322		6,330		12,537		5,816
Non-compete agreements		128		117		126		21
	$	27,768	$	16,136	$	27,854	$	14,527

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Significant Accounting Policies (Tables)

9 Months Ended

Jun. 30, 2011

Significant Accounting Policies (Tables) [Abstract]

Comprehensive income

	Three Months						Nine Months
	Ended June 30,						Ended June 30,
	2011			2010			2011			2010
Net earnings	$	6,836		$	6,424		$	20,121		$	21,325
Foreign currency translation adjustment		335			(1,287	)		1,203			(2,429	)
Income taxes		(117	)		451			(421	)		850
Comprehensive income	$	7,054		$	5,588		$	20,903		$	19,746

Investment portfolio

	June 30, 2011				September 30, 2010
	Cash and				Cash and
	Equivalents		Other		Equivalents		Other
Taxable investments -
Overnight repurchase agreements	$	11,332	$	—	$	14,862	$	—
Money market funds		—		—		10,249		—
Cash on hand -
Restricted		—		1,000		—		1,000
Unrestricted		14,231		—		12,768		—
Total	$	25,563	$	1,000	$	37,879	$	1,000

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Fair Value Measurements

9 Months Ended

Jun. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

7. Fair Value Measurements

We use fair value measurements to value our financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three broad levels, which are described below:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date for assets and liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly. These include quoted prices for identical or similar assets or liabilities in markets that are not active, that is, markets in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers, or in which little information is released publicly and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3: Unobservable inputs, developed using our estimates and assumptions, which reflect those that the market participants would use. Such inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

Determining where an asset or liability falls within the hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and we consider counterparty credit risk in the assessment of fair value.

We had no financial assets or liabilities carried at fair value at June 30, 2011 to be classified as Level 1, 2 or 3. As of September 30, 2010, financial assets and liabilities to be so classified were comprised solely of money market funds totaling $10,249 classified as Level 1, with no financial assets or liabilities classified as Level 2 or Level 3.

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Condensed Consolidated Statement of Changes in Shareholders' Equity (Unaudited) (USD $) In Thousands	Total USD ($)	Common Shares Issued	Additional Paid-In Capital USD ($)	Retained Earnings USD ($)	Accumulated Other Comprehensive Income (Loss) USD ($)	Comprehensive Income (Loss) USD ($)
Beginning balance at Sep. 30, 2010	$ 137,361		$ 94,529	$ 42,177	$ 655
Beginning balance, Shares at Sep. 30, 2010		40,654
Cash dividends paid	(23,192)			(23,192)
Exercise of stock options, value	1,067		1,067
Exercise of stock options, shares		212
Issuance of restricted shares		182
Stock compensation expense	1,981		1,981
Comprehensive income:
Net earnings	20,121			20,121		20,121
Foreign currency translation adjustment	1,203				1,203	1,203
Other comprehensive income taxes	(421)				(421)	(421)
Comprehensive income	20,903					20,903
Ending balance at Jun. 30, 2011	$ 138,120		$ 97,577	$ 39,106	$ 1,437	$ 0
Ending balance, Shares at Jun. 30, 2011		41,048

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Acquisition of Bioline Group

9 Months Ended

Jun. 30, 2011

Acquisition of Bioline Group [Abstract]

Acquisition of Bioline Group

3. Acquisition of Bioline Group

On July 20, 2010, we acquired all of the outstanding common stock of the Bioline group of companies (collectively the “Bioline Group”). We paid $23,849 from cash and equivalents on hand to acquire the Bioline Group. Headquartered in London, England, the Bioline Group is a leading manufacturer and distributor of molecular biology reagents with additional operations in Germany, Australia and the United States. The highly specialized molecular biology reagents it supplies to the life science research, biotech, pharmaceutical and commercial diagnostics markets are the critical components used in PCR testing for DNA, RNA and other genomic testing.

As a result of the consideration paid exceeding the fair value of the net assets being acquired, goodwill in the amount of $12,992 was recorded in connection with this acquisition, none of which will be deductible for tax purposes. This goodwill results largely from the addition of key global operations and direct sales capabilities, management talent and a research-oriented customer base, to complement our existing Life Science operations. In addition to the Bioline Group’s results of operations, which are included in our Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2011 and reported as part of the Life Science operating segment, the consolidated results for the three and nine months ended June 30, 2011 also include:

i)	$0 and $587 of Cost of Sales for the three and nine months, respectively, related to the roll-out of fair value inventory adjustments for sales of products that were in the Bioline Group’s inventory on the date of acquisition and, therefore, were valued at fair value, rather than manufactured cost, in the opening balance sheet; and
ii)	$260 and $767 of General and Administrative Expenses for the three and nine 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.

The results of the Bioline Group included in the consolidated results of the Company for the three and nine months ended June 30, 2011 are as follows, reflecting the items noted above and adjustments to the Group’s income tax provision during the three months ended June 30, 2011:

	Three			Nine
	Months			Months
	Ended			Ended
	June 30, 2011			June 30, 2011
Net Sales	$	3,905		$	10,966
Operating Income (Loss)	$	83		$	(91	)
Net (Loss) Earnings	$	(31	)	$	28

The recognized amounts of identifiable assets acquired and liabilities assumed in the acquisition of the Bioline Group are as follows:

	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		(174	)		12,992
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		(195	)		29,507
Fair value of liabilities assumed -
Accounts payable and accrued expenses		2,817		364			3,181
Deferred income tax liabilities		3,036		(559	)		2,477
Total consideration paid	$	23,849	$	—		$	23,849

As of June 30, 2011, the purchase price allocation related to the acquisition of the Bioline Group has been finalized and is reflected in the above fair values of the assets acquired and liabilities assumed. These fair values are based on the information that was available as of the acquisition date and the subsequent filing of this Form 10-Q and are reflected in the accompanying Condensed Consolidated Balance Sheets, including retrospective adjustment of the September 30, 2010 Condensed Consolidated Balance Sheet.

The consolidated pro forma results of the combined entities of Meridian and the Bioline Group, had the acquisition date been October 1, 2009, are as follows for the periods indicated:

	Three Months				Nine Months
	Ended June 30,				Ended June 30,
	2011		2010		2011		2010
Net Sales	$	40,052	$	37,361	$	118,374	$	117,208
Net Earnings	$	6,857	$	7,201	$	20,565	$	20,757
Diluted Earnings Per Common Share	$	0.17	$	0.17	$	0.50	$	0.50

These pro forma amounts have been calculated after adjusting the results of the Bioline Group to reflect the transaction costs incurred by the Company and the additional amortization that would have been charged assuming the previously-discussed fair value adjustments to inventory and identifiable intangible assets had been applied on October 1, 2009, together with the consequential tax effects. Fiscal 2011 pro forma earnings exclude $21 and $444 for the three and nine month periods, respectively, related to amortization of the fair value adjustments to inventory and identifiable intangible assets and the related tax effects, as these amounts have been included in the fiscal 2010 pro forma earnings.

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Inventories

9 Months Ended

Jun. 30, 2011

Inventories [Abstract]

Inventories

4. Inventories

Inventories are comprised of the following:

	June 30,			September 30,
	2011			2010
Raw materials	$	6,821		$	6,221
Work-in-process		7,655			6,784
Finished goods — illumigene instruments		3,556			455
Finished goods — kits and other		17,443			16,090
Gross inventory		35,475			29,550
Less: Reserves		(1,409	)		(1,130	)
Net inventory	$	34,066		$	28,420

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Intangible Assets (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Sep. 30, 2010
Summary of acquired intangible assets subject to amortization
Gross Carrying Value	$ 27,768		$ 27,768		$ 27,854
Accumulated Amortization	16,136		16,136		14,527
Intangible Assets (Textuals) [Abstract]
Aggregate amortization expense	570	345	1,796	1,079
2011			2,336
2012			2,079
2013			2,078
2014			1,641
2015			1,392
Manufacturing technologies, core products and cell lines [Member]
Summary of acquired intangible assets subject to amortization
Gross Carrying Value	11,664		11,664		11,644
Accumulated Amortization	8,360		8,360		7,693
Trademarks, licenses and patents [Member]
Summary of acquired intangible assets subject to amortization
Gross Carrying Value	3,654		3,654		3,547
Accumulated Amortization	1,329		1,329		997
Customer lists and supply agreements [Member]
Summary of acquired intangible assets subject to amortization
Gross Carrying Value	12,322		12,322		12,537
Accumulated Amortization	6,330		6,330		5,816
Noncompete Agreements [Member]
Summary of acquired intangible assets subject to amortization
Gross Carrying Value	128		128		126
Accumulated Amortization	$ 117		$ 117		$ 21

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Major Customers and Segment Information (Tables)

9 Months Ended

Jun. 30, 2011

Major Customers and Segment Information (Tables) [Abstract]

Segment information for the interim periods

	U.S.		European		Life
	Diagnostics		Diagnostics		Science		Eliminations(1)			Total
Three Months Ended June 30, 2011
Net sales -
Third-party	$	23,829	$	6,612	$	9,611	$	—		$	40,052
Inter-segment		2,875		9		141		(3,025	)		—
Operating income		8,399		978		797		(43	)		10,131
Goodwill (June 30, 2011)		1,381		—		22,062		—			23,443
Other intangible assets, net (June 30, 2011)		1,741		—		9,891		—			11,632
Total assets (June 30, 2011)		71,831		20,680		94,164		(28,724	)		157,951
Three Months Ended June 30, 2010
Net sales -
Third-party	$	21,121	$	6,218	$	6,518	$	—		$	33,857
Inter-segment		2,723		8		177		(2,908	)		—
Operating income		8,104		726		752		194			9,776
Goodwill (September 30, 2010)		1,381		—		21,921		—			23,302
Other intangible assets, net (September 30, 2010)		2,283		9		11,035		—			13,327
Total assets (September 30, 2010)		72,030		18,044		90,388		(25,821	)		154,641
Nine Months Ended June 30, 2011
Net sales -
Third-party	$	72,007	$	18,926	$	27,441	$	—		$	118,374
Inter-segment		7,938		16		459		(8,413	)		—
Operating income		26,780		1,781		1,499		123			30,183
Nine Months Ended June 30, 2010
Net sales -
Third-party	$	70,018	$	19,103	$	18,340	$	—		$	107,461
Inter-segment		8,200		12		438		(8,650	)		—
Operating income		26,805		2,789		2,976		87			32,657

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Major Customers and Segment Information

9 Months Ended

Jun. 30, 2011

Major Customers and Segment Information [Abstract]

Major Customers and Segment Information

5. Major Customers and Segment Information

Meridian was formed in 1976 and functions as a fully-integrated research, development, manufacturing, marketing and sales organization with primary emphasis in the field of life science. Our principal businesses are (i) the development, manufacture and distribution of diagnostic test kits primarily for gastrointestinal, viral, respiratory and parasitic infectious diseases; (ii) the manufacture and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells and bioresearch reagents used by researchers and other diagnostic manufacturers; and (iii) the contract development and manufacture of proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.

Our reportable operating segments are U.S. Diagnostics, European Diagnostics and Life Science. The U.S. Diagnostics operating segment consists of manufacturing operations in Cincinnati, Ohio, and the sale and distribution of diagnostic test kits in the U.S. and countries outside of Europe, Africa and the Middle East. The European Diagnostics operating segment consists of the sale and distribution of diagnostic test kits in Europe, Africa and the Middle East. The Life Science operating segment consists of manufacturing operations in Memphis, Tennessee; Saco, Maine; Boca Raton, Florida; London, England; Luckenwalde, Germany; and Sydney, Australia, and the sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells and bioresearch reagents domestically and abroad. The Life Science operating segment also includes the contract development and manufacture of cGMP clinical grade proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.

Two distributor customers accounted for 47% and 52% of the U.S. Diagnostics operating segment third-party sales during the three months ended June 30, 2011 and 2010, respectively, and 50% and 58% during the nine months ended June 30, 2011 and 2010, respectively. This lower percentage of sales reflects the fact that the majority of our illumigene^® product sales are direct, as well as the comparative decline in the distributors’ inventory stocking of influenza and other products. Three customers accounted for 17% and 29% of the Life Science operating segment third-party sales during the three months ended June 30, 2011 and 2010, respectively, and 18% and 33% during the nine months ended June 30, 2011 and 2010, respectively, primarily reflecting the addition of the Bioline Group.

Segment information for the interim periods is as follows:

	U.S.		European		Life
	Diagnostics		Diagnostics		Science		Eliminations(1)			Total
Three Months Ended June 30, 2011
Net sales -
Third-party	$	23,829	$	6,612	$	9,611	$	—		$	40,052
Inter-segment		2,875		9		141		(3,025	)		—
Operating income		8,399		978		797		(43	)		10,131
Goodwill (June 30, 2011)		1,381		—		22,062		—			23,443
Other intangible assets, net (June 30, 2011)		1,741		—		9,891		—			11,632
Total assets (June 30, 2011)		71,831		20,680		94,164		(28,724	)		157,951
Three Months Ended June 30, 2010
Net sales -
Third-party	$	21,121	$	6,218	$	6,518	$	—		$	33,857
Inter-segment		2,723		8		177		(2,908	)		—
Operating income		8,104		726		752		194			9,776
Goodwill (September 30, 2010)		1,381		—		21,921		—			23,302
Other intangible assets, net (September 30, 2010)		2,283		9		11,035		—			13,327
Total assets (September 30, 2010)		72,030		18,044		90,388		(25,821	)		154,641
Nine Months Ended June 30, 2011
Net sales -
Third-party	$	72,007	$	18,926	$	27,441	$	—		$	118,374
Inter-segment		7,938		16		459		(8,413	)		—
Operating income		26,780		1,781		1,499		123			30,183
Nine Months Ended June 30, 2010
Net sales -
Third-party	$	70,018	$	19,103	$	18,340	$	—		$	107,461
Inter-segment		8,200		12		438		(8,650	)		—
Operating income		26,805		2,789		2,976		87			32,657

(1) Eliminations consist of inter-segment transactions.

Transactions between operating segments are accounted for at established intercompany prices for internal and management purposes, with all intercompany amounts eliminated in consolidation.

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Acquisition of Bioline Group (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Consolidated results of the company
Net Sales	$ 40,052	$ 33,857	$ 118,374	$ 107,461
Operating Income (Loss)	10,131	9,776	30,183	32,657
Net (Loss) Earnings	6,836	6,424	20,121	21,325
Bioline group
Consolidated results of the company
Net Sales	3,905		10,966
Operating Income (Loss)	83		(91)
Net (Loss) Earnings	$ (31)		$ 28

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Fair Value Measurements (Details) (Money Market Funds [Member], USD $) In Thousands	Jun. 30, 2011	Sep. 30, 2010
Level 1 [Member]
Fair Value Measurements (Textuals) [Abstract]
Money market funds	$ 0	$ 10,249
Level 2 [Member]
Fair Value Measurements (Textuals) [Abstract]
Money market funds	0	0
Level 3 [Member]
Fair Value Measurements (Textuals) [Abstract]
Money market funds	$ 0	$ 0

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data	Jun. 30, 2011	Sep. 30, 2010
CURRENT ASSETS
Allowances for accounts receivable	$ 125	$ 241
SHAREHOLDERS' EQUITY
Preferred stock, par value	$ 0	$ 0
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common shares, par value	$ 0	$ 0
Common shares, authorized	71,000,000	71,000,000
Common shares, issued	41,048,269	40,654,286

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Acquisition of Bioline Group (Details 1) (USD $) In Thousands	Jul. 20, 2010
Fair value of assets acquired
Cash and equivalents	$ 3,445
Accounts receivable	1,897
Inventories	2,807
Other current assets	350
Property, plant and equipment, net	816
Goodwill	12,992
Assets	29,507
Fair value of liabilities assumed
Accounts payable and accrued expenses	3,181
Deferred income tax liabilities	2,477
Total consideration paid	23,849
Customer relationships (10 years) [Member]
Fair value of assets acquired
Other intangible assets (estimated useful life)	3,898
Customer relationships (10 years) [Member] | Scenario, Previously Reported [Member]
Fair value of assets acquired
Other intangible assets (estimated useful life)	3,898
Manufacturing processes (6 years) [Member]
Fair value of assets acquired
Other intangible assets (estimated useful life)	1,467
Manufacturing processes (6 years) [Member] | Scenario, Previously Reported [Member]
Fair value of assets acquired
Other intangible assets (estimated useful life)	1,467
License agreements (approx. 8 year wtd. avg.) [Member]
Fair value of assets acquired
Other intangible assets (estimated useful life)	718
License agreements (approx. 8 year wtd. avg.) [Member] | Scenario, Previously Reported [Member]
Fair value of assets acquired
Other intangible assets (estimated useful life)	718
Non-compete agreements (1 year) [Member]
Fair value of assets acquired
Other intangible assets (estimated useful life)	122
Non-compete agreements (1 year) [Member] | Scenario, Previously Reported [Member]
Fair value of assets acquired
Other intangible assets (estimated useful life)	122
Trade names (10 years) [Member]
Fair value of assets acquired
Other intangible assets (estimated useful life)	995
Trade names (10 years) [Member] | Scenario, Previously Reported [Member]
Fair value of assets acquired
Other intangible assets (estimated useful life)	995
Scenario, Previously Reported [Member]
Fair value of assets acquired
Cash and equivalents	3,445
Accounts receivable	1,897
Inventories	2,807
Other current assets	371
Property, plant and equipment, net	816
Goodwill	13,166
Assets	29,702
Fair value of liabilities assumed
Accounts payable and accrued expenses	2,817
Deferred income tax liabilities	3,036
Total consideration paid	23,849
Scenario, Adjustment [Member]
Fair value of assets acquired
Other current assets	(21)
Goodwill	(174)
Assets	(195)
Fair value of liabilities assumed
Accounts payable and accrued expenses	364
Deferred income tax liabilities	(559)
Total consideration paid	$ 0

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Acquisition of Bioline Group (Details Textuals) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Jun. 30, 2011	Jun. 30, 2011	Jul. 20, 2010
Acquisition of Bioline Group (Textuals) [Abstract]
Goodwill recorded in connection with acquisition			$ 12,992
Goodwill expected tax deductible amount			0
Amortization of the fair value adjustments	21	444
Bioline group
Business Acquisition [Line Items]
Cash and equivalents paid for acquisition			23,849
Cost of sales related to fair value inventory adjustments for sales of products	0	587
General and Administrative Expenses related to the amortization of specific identifiable intangible assets	$ 260	$ 767
Customer relationships (10 years) [Member]
Business Acquisition [Line Items]
Estimated useful life of other intangible assets		10
Manufacturing processes (6 years) [Member]
Business Acquisition [Line Items]
Estimated useful life of other intangible assets		6
License agreements (approx. 8 year wtd. avg.) [Member]
Business Acquisition [Line Items]
Estimated weighted average useful life of License agreements		8
Non-compete agreements (1 year) [Member]
Business Acquisition [Line Items]
Estimated useful life of other intangible assets		1
Trade names (10 years) [Member]
Business Acquisition [Line Items]
Estimated useful life of other intangible assets		10

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Basis of Presentation

9 Months Ended

Jun. 30, 2011

Basis of Presentation [Abstract]

Basis of Presentation

1. Basis of Presentation

The interim condensed consolidated financial statements are unaudited and are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, and the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of Management, the interim financial statements include all normal adjustments and disclosures necessary to present fairly the Company’s financial position as of June 30, 2011, the results of its operations for the three and nine month periods ended June 30, 2011 and 2010, and its cash flows for the nine month periods ended June 30, 2011 and 2010. These statements should be read in conjunction with the financial statements and footnotes thereto included in the Company’s fiscal 2010 Annual Report on Form 10-K. Financial information as of September 30, 2010 has been derived from the Company’s audited consolidated financial statements.

The results of operations for interim periods are not necessarily indicative of the results to be expected for the year.

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Acquisition of Bioline Group (Tables)

9 Months Ended

Jun. 30, 2011

Acquisition of Bioline Group (Tables) [Abstract]

Consolidated results of the company

	Three			Nine
	Months			Months
	Ended			Ended
	June 30, 2011			June 30, 2011
Net Sales	$	3,905		$	10,966
Operating Income (Loss)	$	83		$	(91	)
Net (Loss) Earnings	$	(31	)	$	28

Amounts of identifiable assets acquired and liabilities assumed

	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		(174	)		12,992
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		(195	)		29,507
Fair value of liabilities assumed -
Accounts payable and accrued expenses		2,817		364			3,181
Deferred income tax liabilities		3,036		(559	)		2,477
Total consideration paid	$	23,849	$	—		$	23,849

Consolidated pro forma results of the combined entities

	Three Months				Nine Months
	Ended June 30,				Ended June 30,
	2011		2010		2011		2010
Net Sales	$	40,052	$	37,361	$	118,374	$	117,208
Net Earnings	$	6,857	$	7,201	$	20,565	$	20,757
Diluted Earnings Per Common Share	$	0.17	$	0.17	$	0.50	$	0.50

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Significant Accounting Policies (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Sep. 30, 2010	Sep. 30, 2009
Comprehensive income:
Net earnings	$ 6,836	$ 6,424	$ 20,121	$ 21,325
Foreign currency translation adjustment	335	(1,287)	1,203	(2,429)
Other comprehensive income taxes	(117)	451	(421)	850
Comprehensive income	7,054	5,588	20,903	19,746
Investment portfolio
Overnight repurchase agreements	11,332		11,332		14,862
Money market funds					10,249
Restricted cash	1,000		1,000		1,000
Cash on hand - Unrestricted	14,231		14,231		12,768
Cash and equivalents	25,563	58,219	25,563	58,219	37,879	54,030
Significant Accounting Policies (Textuals) [Abstract]
Rebate accruals	$ 4,272		$ 4,272		$ 5,273
Period of pricing agreement			3
Tax benefits recognized from uncertain tax positions measurement			Greater than fifty percent likelihood of being realized upon ultimate settlement

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data	3 Months Ended		9 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Condensed Consolidated Statements of Operations [Abstract]
Net Sales	$ 40,052	$ 33,857	$ 118,374	$ 107,461
COST OF SALES	14,626	12,121	43,046	40,073
GROSS PROFIT	25,426	21,736	75,328	67,388
OPERATING EXPENSES
Research and development	2,710	2,128	7,383	6,521
Selling and marketing	6,143	4,287	17,847	13,495
General and administrative	6,442	4,872	18,675	14,042
European and global sales & marketing leadership reorganization			1,240
Bioline Group transaction costs		673		673
Total operating expenses	15,295	11,960	45,145	34,731
OPERATING INCOME	10,131	9,776	30,183	32,657
OTHER INCOME (EXPENSE)
Interest income	26	29	70	90
Other, net	36	(9)	357	(17)
Total other income (expense)	62	20	427	73
EARNINGS BEFORE INCOME TAXES	10,193	9,796	30,610	32,730
INCOME TAX PROVISION	3,357	3,372	10,489	11,405
NET EARNINGS	$ 6,836	$ 6,424	$ 20,121	$ 21,325
BASIC EARNINGS PER COMMON SHARE	$ 0.17	$ 0.16	$ 0.49	$ 0.53
DILUTED EARNINGS PER COMMON SHARE	$ 0.17	$ 0.16	$ 0.49	$ 0.52
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC	40,737	40,535	40,680	40,510
EFFECT OF DILUTIVE STOCK OPTIONS	657	616	673	656
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED	41,394	41,151	41,353	41,166
ANTI-DILUTIVE SECURITIES:
Common share options	160	234	177	207
DIVIDENDS DECLARED PER COMMON SHARE	$ 0.19	$ 0.19	$ 0.57	$ 0.55