UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
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Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Item 2.02. | Results of Operations and Financial Condition. |
On November 13, 2020, Meridian Bioscience, Inc. (“Meridian” or the “Company”) issued a press release announcing results for the fourth quarter and full fiscal year ended September 30, 2020. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated by reference herein.
Item 7.01. | Regulation FD Disclosure. |
On November 13, 2020, Meridian is hosting a conference call for the benefit of its investors to discuss the results set forth in the press release announcing results for the fourth quarter and full fiscal year ended September 30, 2020 and other business and financial highlights. A copy of the presentation, which is available at www.meridianbioscience.com, related to this conference call is attached as Exhibit 99.2 to this report and is incorporated by reference herein.
The Company’s press release and presentation disclose certain financial results both in accordance with generally accepted accounting principles (“GAAP”) and on a non-GAAP basis with adjustments for certain items. The Company’s management believes that presentation of these non-GAAP financial measures and their related reconciliations are useful to investors because the non-GAAP financial measures provide investors with a basis for comparing the results to financial results from prior periods.
Information in the press release and presentation contains forward-looking statements regarding future events and performance of the Company. All such forward-looking statements are based largely on the Company’s experience and perception of current conditions, trends, expected future developments and other factors, and on management’s expectations, and are subject to risks and uncertainties that could cause actual results to differ materially, including, but not limited to, those factors described in the presentation and in the Company’s filings with the Securities and Exchange Commission. The Company disclaims any intention or obligation to update or revise any financial or other projections or other forward-looking statements, whether because of new information, future events or otherwise.
The information in each of Item 2.02 and Item 7.01 of this Form 8-K and in the press release attached as Exhibit 99.1 and the presentation attached as Exhibit 99.2 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in each of Item 2.02 and Item 7.01 of this Form 8-K and each of Exhibit 99.1 and Exhibit 99.2 shall not be incorporated by reference in any filing (whether made before or after the date hereof) or any other document under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in any such filing or document.
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits |
99.1 | Press Release dated November 13, 2020 | |
99.2 | Conference Call Presentation | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
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 hereunto duly authorized.
MERIDIAN BIOSCIENCE, INC. | ||||||
Date: November 13, 2020 | By: | /s/ Bryan T. Baldasare | ||||
Executive Vice President and Chief Financial Officer | ||||||
(Principal Financial and Accounting Officer) |
Exhibit 99.1
For Immediate Release
MERIDIAN BIOSCIENCE REPORTS STRONG FOURTH QUARTER AND RECORD FULL-YEAR FISCAL 2020 OPERATING RESULTS AND PROVIDES FISCAL 2021 GUIDANCE
CINCINNATI, OHIO November 13, 2020 (GLOBE NEWSWIRE) Meridian Bioscience, Inc. (NASDAQ: VIVO) today announced financial results for the fourth quarter and fiscal year ended September 30, 2020.
Fourth Quarter 2020 Highlights (Comparison to Fourth Quarter Fiscal 2019):
| Consolidated Net Revenue of $64.2 million, up 26% year-over-year |
| Life Science segment delivers revenue of $34.4 million, up 97% year-over-year |
| Diagnostics segment revenues decreased 11% year-over-year to $29.8 million, a stronger than expected rebound from Q3 FY20, up 38% quarter-over-quarter |
| Launched various SARS-CoV-2 antibody pairs, designed for highly sensitive rapid antigen tests (for saliva and nasopharyngeal samples) |
Full Fiscal Year 2020 Highlights (Comparison to Full Year Fiscal 2019):
| Consolidated Net Revenue of $253.7 million, up 26% year-over-year |
| Life Science segment delivers record revenue of $132.5 million, up 106% year-over-year, with the contribution of $71.5 million from COVID-19 related products for immunological and molecular tests |
| Diagnostics segment revenues decreased 11% year-over-year to $121.1 million, due to headwinds from COVID-19 pandemic in the second half |
| Launched the Curian® analyzer and HpSA® assay, the first internally developed new product in several years |
| Completed assay design lock of a PCR COVID-19 test on the Revogene® system and preparing submission to the FDA for Emergency Use Authorization |
| Closed the acquisition of Exalenz Bioscience, adding the BreathID® instrument and its Urea Breath Test for H. pylori to the diagnostics product portfolio |
Fourth Quarter Fiscal 2020 Results (Comparison to Fourth Quarter Fiscal 2019)
Consolidated revenue for the fourth quarter of fiscal 2020 increased 26% to $64.2 million, compared to $50.8 million last year. Diagnostics segment revenues rebounded strongly from the pandemic headwinds seen in the third fiscal quarter, but were still down 11% year-over-year. Life Science segment revenues were up 97%. Our Diagnostics segment experienced a 23% decrease in revenues from our molecular products and revenues from our non-molecular assay products decreased 8%. Our Life Science segment revenues for the quarter included $18.1 million in revenue from COVID-19 related products with $14.6 million coming from molecular products and $3.5 million coming from immunological products.
Reported operating income for the fourth quarter of fiscal 2020 was $9.5 million. Operating expenses included: (i) higher research and development spending in the Diagnostics segment; (ii) acquisition-related costs in connection with the recent Exalenz acquisition; and (iii) purchase accounting amortization related to the acquisition of Exalenz in April 2020, as well as an upward adjustment in the fair value of the earnout obligation for the acquisition of the GenePOC business in 2019. On an adjusted basis, operating income was $12.0 million, a margin of 19% (see non-GAAP financial measure reconciliation below).
Jack Kenny, Chief Executive Officer, commented, This was truly a transformative year for Meridian. All our hard work over the previous two years prepared us to both weather the storm in Diagnostics and excel as a critical partner to the IVD industry battling a global pandemic. Heading into fiscal 2021, we will build on the momentum in Diagnostics and continue the strength in Life Science to deliver another record year.
Full Fiscal Year 2020 Results (Comparison to Full Year Fiscal 2019)
Consolidated revenue for the fiscal year ended September 30, 2020 increased 26% to $253.7 million, compared to $201.0 million in fiscal 2019. Diagnostics segment revenues were down 11%, while Life Science segment revenues were up 106%. Our Diagnostics segment experienced a 17% decrease in revenues from our molecular products and revenues from our non-molecular assay products decreased 10%. Our Life Science segment revenues for the fiscal year included $71.5 million in revenue from COVID-19 related products with $52.2 million coming from molecular products and $19.3 million coming from immunological products.
Reported operating income for fiscal 2020 was $61.3 million. Operating expenses included: (i) higher research and development spending in the Diagnostics segment; (ii) acquisition-related costs in connection with the recent Exalenz acquisition; and (iii) purchase accounting amortization related to the acquisitions of Exalenz and the GenePOC business in April 2020 and June 2019, respectively, as well as a net downward adjustment in the fair value of the earnout obligation for the acquisition of the GenePOC business. On an adjusted basis, operating income was $61.7 million, a margin of 24% (see non-GAAP financial measure reconciliation below).
Bryan Baldasare, Chief Financial Officer, commented, Fiscal 2020 marked not only a record year in revenues and earnings, but also cash flows from operations, allowing us to repay borrowings under our revolving credit facility and increase our available credit capacity.
Fiscal 2021 Guidance
Our fiscal 2021 guidance reflects a big rebound of the Diagnostics segment and continued strong demand for our Life Science reagents used in COVID-19 assays. We expect continued headwinds to our core diagnostics products through the first half, with anticipated full recovery in the second half of the fiscal year. COVID-19 related diagnostics products are expected to supplement that recovery in the fiscal second quarter. Life Science demand is expected to be strong throughout fiscal 2021, between $80 and $85 million, albeit, subject to the same quarter-to-quarter volatility that was seen in fiscal 2020. Adjusted operating margin reflects significant investment in R&D and manufacturing, coupled with costs associated with the acquisition of Exalenz and annualization of headcount increases during fiscal 2020. Gross margin is expected to be relatively flat on a consolidated basis, reflecting a modest improvement for Diagnostics driven by higher volumes from rebounding demand, and a modest decline for Life Science driven by investments to fortify capacity for larger scale manufacturing. Diagnostics investment in new product development is forecast to be 18% of Diagnostics revenue as a result of costs for clinical trials delayed from fiscal 2020, which are added to anticipated spend on products advancing through the development pipeline. Life Science is also investing in infrastructure across sales and R&D to support the new scale of the business.
Revenues
| Consolidated $290 to $310 million |
| Diagnostics segment $140 to $150 million |
| Life Science segment $150 to $160 million |
Adjusted Operating Margin
| Consolidated 23.5% to 24.5% |
Effective Tax Rate
| 23% to 24% |
Adjusted Earnings Per Share on a Diluted Basis (based on 44.3M shares)
| $1.14 to $1.28 |
The higher tax rate compared to 2020 reflects a larger amount of taxable income coming from the United States.
Adjusted operating margin and adjusted earnings per share on a diluted basis for fiscal 2021 exclude costs associated with restructuring activities, changes in the fair value of the earnout obligation and selected legal matters that we expect to continue in fiscal 2021. Current customer order patterns for our Life Science segment coupled with the current trends with the pandemic, indicate revenues for the segment could favor the first half of the fiscal year and are incorporated in our guidance. Finally, this guidance reflects our current line of sight and assumes that we do not encounter any significant reductions in manufacturing capacity as a result of the pandemic causing either partial or full site closures for an extended period of time, or adversely affecting our supply chain for raw materials.
Financial Condition
At September 30, 2020, cash and equivalents were $53.5 million and the Company had $91.2 million of borrowing capacity under its $160.0 million commercial bank credit facility. The Companys bank-debt obligations under the bank credit facility totaled $68.8 million as of September 30, 2020.
Conference Call Information
Jack Kenny, Chief Executive Officer, and Bryan Baldasare, Executive Vice President and Chief Financial Officer, will host a conference call on Friday, November 13, 2020 beginning at 10:00 a.m. Eastern Time to discuss the fourth quarter and full fiscal year financial results and answer questions. A presentation to accompany the quarterly and full fiscal year financial results and related discussion will be made available within the Investor Relations section of the Companys website, www.meridianbioscience.com, prior to the conference call.
To participate in the live call by telephone from the U.S., dial (866) 443-5802, or from outside the U.S., dial (513) 360-6924, and enter the audience pass code 3958286. A replay will be available for 14 days beginning at 1:00 p.m. Eastern Time on November 13, 2020 by dialing (855) 859-2056 or (404) 537-3406 and entering pass code 3958286.
FOURTH QUARTER AND FISCAL 2020 UNAUDITED OPERATING RESULTS
(In Thousands, Except per Share Data)
The following table sets forth the unaudited comparative results of Meridian on a U.S. GAAP basis for the interim and annual periods of fiscal 2020 and fiscal 2019.
Three Months Ended | Twelve Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Net revenues |
$ | 64,153 | $ | 50,846 | $ | 253,667 | $ | 201,014 | ||||||||
Cost of sales |
25,822 | 21,664 | 97,419 | 82,286 | ||||||||||||
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Gross profit |
38,331 | 29,182 | 156,248 | 118,728 | ||||||||||||
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Operating expenses |
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Research and development |
6,983 | 5,607 | 23,729 | 17,760 | ||||||||||||
Selling and marketing |
7,210 | 7,140 | 26,486 | 27,995 | ||||||||||||
General and administrative |
12,109 | 8,872 | 44,345 | 34,044 | ||||||||||||
Acquisition-related costs |
462 | 363 | 3,890 | 1,808 | ||||||||||||
Change in fair value of contingent consideration obligation |
1,135 | | (6,293 | ) | | |||||||||||
Restructuring costs |
67 | 1,138 | 687 | 2,839 | ||||||||||||
Selected legal costs |
891 | 213 | 2,080 | 1,583 | ||||||||||||
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Total operating expenses |
28,857 | 23,333 | 94,924 | 86,029 | ||||||||||||
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Operating income |
9,474 | 5,849 | 61,324 | 32,699 | ||||||||||||
Other expense, net |
(1,727 | ) | (493 | ) | (2,031 | ) | (1,142 | ) | ||||||||
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Earnings before income taxes |
7,747 | 5,356 | 59,293 | 31,557 | ||||||||||||
Income tax provision |
1,254 | 1,253 | 13,107 | 7,175 | ||||||||||||
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Net earnings |
$ | 6,493 | $ | 4,103 | $ | 46,186 | $ | 24,382 | ||||||||
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Net earnings per basic common share |
$ | 0.15 | $ | 0.10 | $ | 1.08 | $ | 0.57 | ||||||||
Basic common shares outstanding |
42,940 | 42,711 | 42,855 | 42,571 | ||||||||||||
Net earnings per diluted common share |
$ | 0.15 | $ | 0.10 | $ | 1.07 | $ | 0.57 | ||||||||
Diluted common shares outstanding |
43,642 | 42,916 | 43,174 | 42,899 |
Three Months Ended | Twelve Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Adjusted Financial Measures |
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(see non-GAAP financial measure reconciliation below) |
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Operating income |
$ | 12,029 | $ | 7,563 | $ | 61,688 | $ | 38,929 | ||||||||
Net earnings |
8,289 | 5,399 | 46,301 | 29,142 | ||||||||||||
Net earnings per diluted common share |
$ | 0.19 | $ | 0.13 | $ | 1.07 | $ | 0.68 |
Condensed Balance Sheet Data
September 30, | ||||||||
2020 | 2019 | |||||||
Cash and equivalents |
$ | 53,514 | $ | 62,397 | ||||
Working capital |
109,666 | 123,847 | ||||||
Long-term debt |
68,824 | 75,824 | ||||||
Shareholders equity |
247,629 | 190,967 | ||||||
Total assets |
405,261 | 325,478 |
Segment Data
The following table sets forth the unaudited revenue and segment data for the interim and annual periods in fiscal 2020 and fiscal 2019 (in thousands).
Three Months Ended | Twelve Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Net Revenues - By Product Platform/Type |
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Diagnostics |
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Molecular assays |
$ | 4,648 | $ | 6,074 | $ | 21,907 | $ | 26,283 | ||||||||
Non-molecular assays |
25,153 | 27,325 | 99,225 | 110,399 | ||||||||||||
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Total Diagnostics |
29,801 | 33,399 | 121,132 | 136,682 | ||||||||||||
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Life Science |
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Molecular reagents |
22,703 | 5,764 | 78,431 | 23,261 | ||||||||||||
Immunological reagents |
11,649 | 11,683 | 54,104 | 41,071 | ||||||||||||
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Total Life Science |
34,352 | 17,447 | 132,535 | 64,332 | ||||||||||||
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Total Net Revenues |
$ | 64,153 | $ | 50,846 | $ | 253,667 | $ | 201,014 | ||||||||
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Three Months Ended | Twelve Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Net Revenues - By Disease State/Geography |
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Diagnostics |
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Gastrointestinal assays |
$ | 15,396 | $ | 16,958 | $ | 55,040 | $ | 68,982 | ||||||||
Respiratory illness assays |
3,030 | 5,380 | 26,694 | 26,622 | ||||||||||||
Blood chemistry assays |
5,026 | 5,275 | 17,534 | 18,639 | ||||||||||||
Other |
6,349 | 5,786 | 21,864 | 22,439 | ||||||||||||
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Total Diagnostics |
29,801 | 33,399 | 121,132 | 136,682 | ||||||||||||
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Life Science |
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Americas |
6,795 | 5,092 | 37,391 | 19,441 | ||||||||||||
EMEA |
17,115 | 7,241 | 58,125 | 28,850 | ||||||||||||
ROW |
10,442 | 5,114 | 37,019 | 16,041 | ||||||||||||
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Total Life Science |
34,352 | 17,447 | 132,535 | 64,332 | ||||||||||||
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Total Net Revenues |
$ | 64,153 | $ | 50,846 | $ | 253,667 | $ | 201,014 | ||||||||
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OPERATING INCOME |
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Diagnostics |
$ | (4,174 | ) | $ | 2,728 | $ | 3,885 | $ | 25,390 | |||||||
Life Science |
17,234 | 5,007 | 68,826 | 17,581 | ||||||||||||
Corporate |
(3,605 | ) | (1,923 | ) | (11,437 | ) | (10,373 | ) | ||||||||
Eliminations |
19 | 37 | 50 | 101 | ||||||||||||
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Total Operating Income |
$ | 9,474 | $ | 5,849 | $ | 61,324 | $ | 32,699 | ||||||||
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Geographic Regions
Americas = North and Latin America
EMEA = Europe, Middle East and Africa
ROW = Rest of World
NON-GAAP FINANCIAL MEASURES
In this press release, we have supplemented our reported GAAP financial information with information on operating expenses, operating income, operating margin, net earnings, basic earnings per share and diluted earnings per share, each on an adjusted basis excluding the effects of acquisition-related costs, changes in fair value of the contingent consideration obligation, restructuring costs, and selected legal costs, each of which is a non-GAAP measure. We have provided in the tables below reconciliations to the operating expenses, operating income, net earnings, basic earnings per share and diluted earnings per share amounts reported under U.S. Generally Accepted Accounting Principles for the fourth quarters and fiscal years ended September 30, 2020 and September 30, 2019.
We believe this information is useful to an investor in evaluating our performance because:
1. | These measures help investors to more meaningfully evaluate and compare the results of operations from period to period by removing the impacts of these non-routine items; 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. |
These non-GAAP measures may be different from non-GAAP measures used by other companies. In addition, the non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations, in that they do not reflect all amounts associated with our results as determined in accordance with U.S. GAAP. Therefore, these measures should only be used to evaluate our results in conjunction with corresponding GAAP measures.
FOURTH QUARTER AND FISCAL YEAR
GAAP TO NON-GAAP RECONCILIATION TABLES
(In Thousands, Except per Share Data)
Three Months | Twelve Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Operating Expenses - |
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U.S. GAAP basis |
$ | 28,857 | $ | 23,333 | $ | 94,924 | $ | 86,029 | ||||||||
Acquisition-related costs |
(462 | ) | (363 | ) | (3,890 | ) | (1,808 | ) | ||||||||
Change in fair value of contingent consideration obligation |
(1,135 | ) | | 6,293 | | |||||||||||
Restructuring costs |
(67 | ) | (1,138 | ) | (687 | ) | (2,839 | ) | ||||||||
Selected legal costs |
(891 | ) | (213 | ) | (2,080 | ) | (1,583 | ) | ||||||||
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Adjusted Operating Expenses |
$ | 26,302 | $ | 21,619 | $ | 94,560 | $ | 79,799 | ||||||||
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Operating Income - |
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U.S. GAAP basis |
$ | 9,474 | $ | 5,849 | $ | 61,324 | $ | 32,699 | ||||||||
Acquisition-related costs |
462 | 363 | 3,890 | 1,808 | ||||||||||||
Change in fair value of contingent consideration obligation |
1,135 | | (6,293 | ) | | |||||||||||
Restructuring costs |
67 | 1,138 | 687 | 2,839 | ||||||||||||
Selected legal costs |
891 | 213 | 2,080 | 1,583 | ||||||||||||
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Adjusted Operating Income |
$ | 12,029 | $ | 7,563 | $ | 61,688 | $ | 38,929 | ||||||||
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Net Earnings - |
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U.S. GAAP basis |
$ | 6,493 | $ | 4,103 | $ | 46,186 | $ | 24,382 | ||||||||
Acquisition-related costs, including gain on currency hedge of purchase price * |
212 | 273 | 2,751 | 1,381 | ||||||||||||
Change in fair value of contingent consideration obligation * |
867 | | (4,726 | ) | | |||||||||||
Restructuring costs * |
50 | 864 | 528 | 2,169 | ||||||||||||
Selected legal costs * |
667 | 159 | 1,562 | 1,210 | ||||||||||||
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Adjusted Earnings |
$ | 8,289 | $ | 5,399 | $ | 46,301 | $ | 29,142 | ||||||||
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Basic Earnings per Common Share - |
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U.S. GAAP basis |
$ | 0.15 | $ | 0.10 | $ | 1.08 | $ | 0.57 | ||||||||
Acquisition-related costs, including gain on currency hedge of purchase price |
| 0.01 | 0.06 | 0.03 | ||||||||||||
Change in fair value of contingent consideration obligation |
0.02 | | (0.11 | ) | | |||||||||||
Restructuring costs |
| 0.02 | 0.01 | 0.05 | ||||||||||||
Selected legal costs |
0.02 | | 0.04 | 0.03 | ||||||||||||
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Adjusted Basic EPS |
$ | 0.19 | $ | 0.13 | $ | 1.08 | $ | 0.68 | ||||||||
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Three Months | Twelve Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Diluted Earnings per Common Share - |
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U.S. GAAP basis |
$ | 0.15 | $ | 0.10 | $ | 1.07 | $ | 0.57 | ||||||||
Acquisition-related costs, including gain on currency hedge of purchase price |
| 0.01 | 0.06 | 0.03 | ||||||||||||
Change in fair value of contingent consideration obligation |
0.02 | | (0.11 | ) | | |||||||||||
Restructuring costs |
| 0.02 | 0.01 | 0.05 | ||||||||||||
Selected legal costs |
0.02 | | 0.04 | 0.03 | ||||||||||||
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Adjusted Diluted EPS |
$ | 0.19 | $ | 0.13 | $ | 1.07 | $ | 0.68 | ||||||||
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* | Net of tax. |
FORWARD-LOOKING STATEMENTS
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 continues, estimates, anticipates, projects, plans, seeks, may, will, expects, intends, believes, signals, should, can and similar expressions or the negative versions thereof and which also may be identified by their context. All statements that address operating performance or events or developments that Meridian expects or anticipates will occur in the future, including, but not limited to, statements relating to per share diluted earnings, sales, product demand, revenue, operating margin, other guidance and the impact of COVID-19 on our business and prospects, are forward-looking statements. Such statements, whether expressed or implied, are based upon current expectations of the Company and speak only as of the date made. Specifically, Meridians forward-looking statements are, and will be, based on managements then-current views and assumptions regarding future events and operating performance. Meridian assumes no obligation to publicly update or revise any forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. These statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially, including, without limitation, the following:
Meridians operating results, financial condition and 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 Meridians competition, its ability to effectively sell such products and its ability to successfully expand and effectively manage increased sales and marketing operations. While Meridian has introduced a number of internally developed products and acquired products, there can be no assurance that it will be successful in the future in introducing such products on a timely basis or in protecting its intellectual property, and unexpected or costly manufacturing costs associated with its introduction of new products or acquired products could cause actual results to differ from expectations. Meridian relies on proprietary, patented and licensed technologies. As such, the Companys ability to protect its intellectual property rights, as well as the potential for intellectual property litigation, would impact its results. Ongoing consolidations of reference laboratories and formation of multi-hospital alliances may cause adverse changes to pricing and distribution. Recessionary pressures on the economy and the markets in which our customers operate, as well as adverse trends in buying patterns from customers, can change expected results. Costs and difficulties in complying with laws and regulations, including those administered by the United States Food and Drug Administration, can result in unanticipated expenses and delays and interruptions to the sale of new and existing products, as can the uncertainty of regulatory approvals and the regulatory process (including the currently ongoing study and other FDA actions regarding the Companys LeadCare products). The international scope of Meridians operations, including changes in the relative strength or weakness of the U.S. dollar and general economic conditions in foreign countries, can impact results and make them difficult to predict. One of Meridians 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 Meridians 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 Meridians ability to recognize the benefits of acquisitions, including potential synergies and cost savings or the failure of acquisitions to achieve their plans and objectives. Meridian cannot predict the outcome of future goodwill impairment testing and the impact of possible goodwill impairments on Meridians earnings and financial results. Meridian cannot predict the possible impact of U.S. health care legislation enacted in 2010 the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act and any modification or repeal of any of the provisions thereof initiated by Congress or the presidential administration, and any similar initiatives in other countries on its results of operations. Efforts to reduce the U.S. federal deficit, breaches of Meridians information technology systems, trade wars, increased tariffs, and natural disasters and other events could have a materially adverse effect on Meridians results of operations and revenues. In the past, the Company has identified a material weakness in our internal control over financial reporting, which has been remediated, but the Company can make no assurances that a material weakness will not be identified in the future, which if identified and not properly corrected, could materially adversely affect our operations and result in material misstatements in our financial statements. Meridian also is subject to risks and uncertainties related to disruptions to or reductions in business operations or prospects due to pandemics, epidemics, widespread health emergencies, or outbreaks of infectious diseases such as the coronavirus disease COVID-19. In addition to the factors described in this paragraph, as well as those factors identified from time to time in our filings with the Securities and Exchange Commission, Part I, Item 1A Risk Factors of our most recent Annual Report on Form 10-K contains a list and description of uncertainties, risks and other matters that may affect the Company. Readers should carefully review these forward-looking statements and risk factors, and not place undue reliance on our forward-looking statements.
About Meridian Bioscience, Inc.
Meridian is a fully integrated life science company that develops, manufactures, markets and distributes a broad range of innovative diagnostic products. We are dedicated to developing and delivering better solutions that give answers with speed, accuracy and simplicity that are redefining the possibilities of life from discovery to diagnosis. Through discovery and development, we provide critical life science raw materials used in immunological and molecular tests for human, animal, plant, and environmental applications. Through diagnosis, we provide diagnostic solutions in areas including gastrointestinal and upper respiratory infections and blood lead level testing. We build relationships and provide solutions to hospitals, reference laboratories, research centers, veterinary testing centers, physician offices, diagnostics manufacturers, and biotech companies in more than 70 countries around the world.
Meridians shares are traded on the NASDAQ Global Select Market, symbol VIVO. Meridians website address is www.meridianbioscience.com.
Contact:
Charlie Wood
Vice President Investor Relations
Meridian Bioscience, Inc.
Phone: +1 513.271.3700
Email: mbi@meridianbioscience.com
###
Exhibit 99.2 FY2020 Q4 & Full Year Results November 13, 2020Exhibit 99.2 FY2020 Q4 & Full Year Results November 13, 2020
Forward Looking Statements 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 presentation 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 “continues”, “estimates”, “anticipates”, “projects”, “plans”, “seeks”, “may”, “will”, “expects”, “intends”, “believes”, “signals”, “should”, “can” and similar expressions or the negative versions thereof and which also may be identified by their context. All statements that address operating performance or events or developments that Meridian expects or anticipates will occur in the future, including, but not limited to, statements relating to per share diluted earnings, sales, product demand, revenue, operating margin, other guidance and the impact of COVID-19 on our business and prospects, are forward-looking statements. Such statements, whether expressed or implied, are based upon current expectations of the Company and speak only as of the date made. Specifically, Meridian’s forward-looking statements are, and will be, based on management’s then-current views and assumptions regarding future events and operating performance. Meridian assumes no obligation to publicly update or revise any forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. These statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially, including, without limitation, the following: Meridian’s operating results, financial condition and 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, its ability to effectively sell such products and its ability to successfully expand and effectively manage increased sales and marketing operations. While Meridian has introduced a number of internally developed products and acquired products, there can be no assurance that it will be successful in the future in introducing such products on a timely basis or in protecting its intellectual property, and unexpected or costly manufacturing costs associated with its introduction of new products or acquired products could cause actual results to differ from expectations. Meridian relies on proprietary, patented and licensed technologies. As such, the Company’s ability to protect its intellectual property rights, as well as the potential for intellectual property litigation, would impact its results. Ongoing consolidations of reference laboratories and formation of multi-hospital alliances may cause adverse changes to pricing and distribution. Recessionary pressures on the economy and the markets in which our customers operate, as well as adverse trends in buying patterns from customers, can change expected results. Costs and difficulties in complying with laws and regulations, including those administered by the United States Food and Drug Administration, can result in unanticipated expenses and delays and interruptions to the sale of new and existing products, as can the uncertainty of regulatory approvals and the regulatory process (including the currently ongoing study and other FDA actions regarding the Company’s LeadCare products). The international scope of Meridian’s operations, including changes in the relative strength or weakness of the U.S. dollar and general economic conditions in foreign countries, can impact results and make them difficult to predict. One of Meridian’s growth strategies is the acquisition of companies and product lines. There can be no assurance that additional acquisitions will be consummated or that, if consummated, will be successful and the acquired businesses will be successfully integrated into Meridian’s operations. There may be risks that acquisitions may disrupt operations and may pose potential difficulties in employee retention, and there may be additional risks with respect to Meridian’s ability to recognize the benefits of acquisitions, including potential synergies and cost savings or the failure of acquisitions to achieve their plans and objectives. Meridian cannot predict the outcome of future goodwill impairment testing and the impact of possible goodwill impairments on Meridian’s earnings and financial results. Meridian cannot predict the possible impact of U.S. health care legislation enacted in 2010 – the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act – and any modification or repeal of any of the provisions thereof initiated by Congress or the presidential administration, and any similar initiatives in other countries on its results of operations. Efforts to reduce the U.S. federal deficit, breaches of Meridian’s information technology systems, trade wars, increased tariffs, and natural disasters and other events could have a materially adverse effect on Meridian’s results of operations and revenues. In the past, the Company has identified a material weakness in our internal control over financial reporting, which has been remediated, but the Company can make no assurances that a material weakness will not be identified in the future, which if identified and not properly corrected, could materially adversely affect our operations and result in material misstatements in our financial statements. Meridian also is subject to risks and uncertainties related to disruptions to or reductions in business operations or prospects due to pandemics, epidemics, widespread health emergencies, or outbreaks of infectious diseases such as the coronavirus disease COVID-19. In addition to the factors described in this paragraph, please also refer to additional factors identified from time to time in our filings with the Securities and Exchange Commission, including in Part I, Item 1A Risk Factors of our most recent Annual Report on Form 10-K, which contains a list and description of uncertainties, risks and other matters that may affect the Company. Readers should carefully review these forward-looking statements and risk factors, and not place undue reliance on our forward-looking statements.Forward Looking Statements 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 presentation 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 “continues”, “estimates”, “anticipates”, “projects”, “plans”, “seeks”, “may”, “will”, “expects”, “intends”, “believes”, “signals”, “should”, “can” and similar expressions or the negative versions thereof and which also may be identified by their context. All statements that address operating performance or events or developments that Meridian expects or anticipates will occur in the future, including, but not limited to, statements relating to per share diluted earnings, sales, product demand, revenue, operating margin, other guidance and the impact of COVID-19 on our business and prospects, are forward-looking statements. Such statements, whether expressed or implied, are based upon current expectations of the Company and speak only as of the date made. Specifically, Meridian’s forward-looking statements are, and will be, based on management’s then-current views and assumptions regarding future events and operating performance. Meridian assumes no obligation to publicly update or revise any forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. These statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially, including, without limitation, the following: Meridian’s operating results, financial condition and 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, its ability to effectively sell such products and its ability to successfully expand and effectively manage increased sales and marketing operations. While Meridian has introduced a number of internally developed products and acquired products, there can be no assurance that it will be successful in the future in introducing such products on a timely basis or in protecting its intellectual property, and unexpected or costly manufacturing costs associated with its introduction of new products or acquired products could cause actual results to differ from expectations. Meridian relies on proprietary, patented and licensed technologies. As such, the Company’s ability to protect its intellectual property rights, as well as the potential for intellectual property litigation, would impact its results. Ongoing consolidations of reference laboratories and formation of multi-hospital alliances may cause adverse changes to pricing and distribution. Recessionary pressures on the economy and the markets in which our customers operate, as well as adverse trends in buying patterns from customers, can change expected results. Costs and difficulties in complying with laws and regulations, including those administered by the United States Food and Drug Administration, can result in unanticipated expenses and delays and interruptions to the sale of new and existing products, as can the uncertainty of regulatory approvals and the regulatory process (including the currently ongoing study and other FDA actions regarding the Company’s LeadCare products). The international scope of Meridian’s operations, including changes in the relative strength or weakness of the U.S. dollar and general economic conditions in foreign countries, can impact results and make them difficult to predict. One of Meridian’s growth strategies is the acquisition of companies and product lines. There can be no assurance that additional acquisitions will be consummated or that, if consummated, will be successful and the acquired businesses will be successfully integrated into Meridian’s operations. There may be risks that acquisitions may disrupt operations and may pose potential difficulties in employee retention, and there may be additional risks with respect to Meridian’s ability to recognize the benefits of acquisitions, including potential synergies and cost savings or the failure of acquisitions to achieve their plans and objectives. Meridian cannot predict the outcome of future goodwill impairment testing and the impact of possible goodwill impairments on Meridian’s earnings and financial results. Meridian cannot predict the possible impact of U.S. health care legislation enacted in 2010 – the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act – and any modification or repeal of any of the provisions thereof initiated by Congress or the presidential administration, and any similar initiatives in other countries on its results of operations. Efforts to reduce the U.S. federal deficit, breaches of Meridian’s information technology systems, trade wars, increased tariffs, and natural disasters and other events could have a materially adverse effect on Meridian’s results of operations and revenues. In the past, the Company has identified a material weakness in our internal control over financial reporting, which has been remediated, but the Company can make no assurances that a material weakness will not be identified in the future, which if identified and not properly corrected, could materially adversely affect our operations and result in material misstatements in our financial statements. Meridian also is subject to risks and uncertainties related to disruptions to or reductions in business operations or prospects due to pandemics, epidemics, widespread health emergencies, or outbreaks of infectious diseases such as the coronavirus disease COVID-19. In addition to the factors described in this paragraph, please also refer to additional factors identified from time to time in our filings with the Securities and Exchange Commission, including in Part I, Item 1A Risk Factors of our most recent Annual Report on Form 10-K, which contains a list and description of uncertainties, risks and other matters that may affect the Company. Readers should carefully review these forward-looking statements and risk factors, and not place undue reliance on our forward-looking statements.
Non-GAAP Financial Measures Certain financial measures presented in this presentation, such as operating expenses, operating income, operating margin, net earnings and earnings per diluted share, each on an adjusted basis, excluding as applicable the effects of acquisition-related costs, changes in fair value of contingent consideration obligation, restructuring costs and selected legal costs, are not recognized under generally accepted accounting principles in the United States of America, or U.S. GAAP. Management believes this non-GAAP financial information is useful to an investor in evaluating our performance, as these measures: (i) help investors to more meaningfully evaluate and compare the results of operations from period to period by removing the impacts of these non-routine items; and (ii) are used by management for various purposes, including evaluating performance from period to period in presentations to our board of directors, and as a basis for strategic planning and forecasting. While we believe these financial measures are commonly used by investors to evaluate our performance and that of our competitors, the non-GAAP measures in this presentation may be different from non-GAAP measures used by other companies and should not be considered as an alternative to performance measures derived in accordance with U.S. GAAP. In addition, the non-GAAP measures presented herein are not based on any comprehensive set of accounting rules or principles. These non-GAAP measures have limitations, in that they do not reflect all amounts associated with our results as determined in accordance with U.S. GAAP, and they should not be considered as alternatives to information attributable to Meridian Bioscience, Inc. determined in accordance with U.S. GAAP. See the consolidated financial statements included in our reports filed with the U.S. Securities and Exchange Commission for our U.S. GAAP results. Additionally, for reconciliations of the non-GAAP measures included herein to our closest reported U.S. GAAP measures, refer to the reconciliations included in the press release of Meridian Bioscience, Inc. dated November 13, 2020.Non-GAAP Financial Measures Certain financial measures presented in this presentation, such as operating expenses, operating income, operating margin, net earnings and earnings per diluted share, each on an adjusted basis, excluding as applicable the effects of acquisition-related costs, changes in fair value of contingent consideration obligation, restructuring costs and selected legal costs, are not recognized under generally accepted accounting principles in the United States of America, or U.S. GAAP. Management believes this non-GAAP financial information is useful to an investor in evaluating our performance, as these measures: (i) help investors to more meaningfully evaluate and compare the results of operations from period to period by removing the impacts of these non-routine items; and (ii) are used by management for various purposes, including evaluating performance from period to period in presentations to our board of directors, and as a basis for strategic planning and forecasting. While we believe these financial measures are commonly used by investors to evaluate our performance and that of our competitors, the non-GAAP measures in this presentation may be different from non-GAAP measures used by other companies and should not be considered as an alternative to performance measures derived in accordance with U.S. GAAP. In addition, the non-GAAP measures presented herein are not based on any comprehensive set of accounting rules or principles. These non-GAAP measures have limitations, in that they do not reflect all amounts associated with our results as determined in accordance with U.S. GAAP, and they should not be considered as alternatives to information attributable to Meridian Bioscience, Inc. determined in accordance with U.S. GAAP. See the consolidated financial statements included in our reports filed with the U.S. Securities and Exchange Commission for our U.S. GAAP results. Additionally, for reconciliations of the non-GAAP measures included herein to our closest reported U.S. GAAP measures, refer to the reconciliations included in the press release of Meridian Bioscience, Inc. dated November 13, 2020.
FY2020 Business Highlights • Raised guidance twice & exceeded on all metrics • Life Science rapid growth & Diagnostics moderately down due to pandemic • Closed acquisition of Exalenz & advanced integration • Launched Curian & HpSA assay, plus 50+ new Life Science products Diagnostics Life ScienceFY2020 Business Highlights • Raised guidance twice & exceeded on all metrics • Life Science rapid growth & Diagnostics moderately down due to pandemic • Closed acquisition of Exalenz & advanced integration • Launched Curian & HpSA assay, plus 50+ new Life Science products Diagnostics Life Science
FY2020 Full Year Earnings Summary ($000’s except Per Share Amounts) Adjusted (Non-GAAP) FY2020 FY2019 Change Highlights Revenue $253,667 $201,014 +26% • Record revenues and earnings Gross Margin % 62% 59% +3 pts • Life Science revenues doubled driven (1) Operating expenses $94,560 $79,799 +18% by reagents for COVID-19 assays. Ratio 37% 40% -3 pts • Diagnostics adversely affected by COVID-19 pandemic but showed Operating income $61,688 $38,929 +58% meaningful rebound from Q3 to Q4. Margin % 24% 19% +5 pts Net earnings $46,301 $29,142 +59% • Gross margin reflects strength of Life Science EPS $1.07 $0.68 +57% scale for worldwide demand. GAAP FY2020 FY2019 Change • Increased operating expenses stems from $7M increase in Diagnostics R&D, $7M increase in Operating expenses $94,924 $86,029 +10% incentive compensation, and $3M increase in Operating income $61,324 $32,699 +88% purchase accounting amortization. Margin % 24% 16% +8 pts Net earnings $46,186 $24,382 +89% EPS $1.07 $0.57 +88% (1) Includes Corporate Segment expenses of $9.4M in 2020 and $7.7M in 2019.FY2020 Full Year Earnings Summary ($000’s except Per Share Amounts) Adjusted (Non-GAAP) FY2020 FY2019 Change Highlights Revenue $253,667 $201,014 +26% • Record revenues and earnings Gross Margin % 62% 59% +3 pts • Life Science revenues doubled driven (1) Operating expenses $94,560 $79,799 +18% by reagents for COVID-19 assays. Ratio 37% 40% -3 pts • Diagnostics adversely affected by COVID-19 pandemic but showed Operating income $61,688 $38,929 +58% meaningful rebound from Q3 to Q4. Margin % 24% 19% +5 pts Net earnings $46,301 $29,142 +59% • Gross margin reflects strength of Life Science EPS $1.07 $0.68 +57% scale for worldwide demand. GAAP FY2020 FY2019 Change • Increased operating expenses stems from $7M increase in Diagnostics R&D, $7M increase in Operating expenses $94,924 $86,029 +10% incentive compensation, and $3M increase in Operating income $61,324 $32,699 +88% purchase accounting amortization. Margin % 24% 16% +8 pts Net earnings $46,186 $24,382 +89% EPS $1.07 $0.57 +88% (1) Includes Corporate Segment expenses of $9.4M in 2020 and $7.7M in 2019.
FY2020 Full Year Operating Segment Highlights ($000’s) Life Science Diagnostics FY2020 FY2019 Change FY2020 FY2019 Change (Adjusted Non-GAAP) (Adjusted Non-GAAP) Revenue $121,132 $136,682 -11% Revenue $132,535 $64,332 +106% Operating income $1,969 $28,836 -93% Operating income $69,026 $17,769 +288% Margin % 2% 21% -19 pts Margin % 52% 28% +24 pts Diagnostics revenue by: Life Science revenue by: Technology: Technology: Molecular assays $21,907 $26,283 -17% Molecular reagents $78,431 $23,261 +237% Non-molecular assays 99,225 110,399 -10% Immunological reagents 54,104 41,071 +32% Disease State: Region: GI (Gastrointestinal) $55,040 $68,982 -20% Americas $37,391 $19,441 +92% RI (Respiratory Illnesses) 26,694 26,622 - % EMEA 58,125 28,850 +101% Blood Chemistry (Lead) 17,534 18,639 -6% ROW 37,019 16,041 +131% Other 21,864 22,439 -3% China (included in ROW) 19,045 8,374 +127% Product / Customer Highlights: Product / Customer Highlights: • All product categories were adversely affected by lower test volumes • COVID-19 related reagent sales contributed $71.5M. because of the Pandemic. • Core reagent business (non-COVID-19) was 95% to last year. • H1 overall revenues were down 1%; H2 down 23% with Q4 up nearly 40% to Q3.FY2020 Full Year Operating Segment Highlights ($000’s) Life Science Diagnostics FY2020 FY2019 Change FY2020 FY2019 Change (Adjusted Non-GAAP) (Adjusted Non-GAAP) Revenue $121,132 $136,682 -11% Revenue $132,535 $64,332 +106% Operating income $1,969 $28,836 -93% Operating income $69,026 $17,769 +288% Margin % 2% 21% -19 pts Margin % 52% 28% +24 pts Diagnostics revenue by: Life Science revenue by: Technology: Technology: Molecular assays $21,907 $26,283 -17% Molecular reagents $78,431 $23,261 +237% Non-molecular assays 99,225 110,399 -10% Immunological reagents 54,104 41,071 +32% Disease State: Region: GI (Gastrointestinal) $55,040 $68,982 -20% Americas $37,391 $19,441 +92% RI (Respiratory Illnesses) 26,694 26,622 - % EMEA 58,125 28,850 +101% Blood Chemistry (Lead) 17,534 18,639 -6% ROW 37,019 16,041 +131% Other 21,864 22,439 -3% China (included in ROW) 19,045 8,374 +127% Product / Customer Highlights: Product / Customer Highlights: • All product categories were adversely affected by lower test volumes • COVID-19 related reagent sales contributed $71.5M. because of the Pandemic. • Core reagent business (non-COVID-19) was 95% to last year. • H1 overall revenues were down 1%; H2 down 23% with Q4 up nearly 40% to Q3.
FY2020 Full Year COVID-19 Product Contribution ($000’s) Life Science Q1 Q2 Q3 Q4 FY2020 COVID-19 reagents revenue $ - $5,600 $47,800 $18,100 $71,500 % of Total Life Science Revenue NA 25% 76% 53% 54% Life Science COVID-19 revenue by: Technology: Molecular reagents $ - $5,600 $32,000 $14,600 $52,200 Immunological reagents - - 15,800 3,500 19,300 Region: Americas $ - $ - $17,800 $3,300 $21,100 EMEA - 2,400 18,900 9,600 30,900 ROW - 3,200 11,100 5,200 19,500 China (included in ROW) - 2,800 7,800 250 10,850FY2020 Full Year COVID-19 Product Contribution ($000’s) Life Science Q1 Q2 Q3 Q4 FY2020 COVID-19 reagents revenue $ - $5,600 $47,800 $18,100 $71,500 % of Total Life Science Revenue NA 25% 76% 53% 54% Life Science COVID-19 revenue by: Technology: Molecular reagents $ - $5,600 $32,000 $14,600 $52,200 Immunological reagents - - 15,800 3,500 19,300 Region: Americas $ - $ - $17,800 $3,300 $21,100 EMEA - 2,400 18,900 9,600 30,900 ROW - 3,200 11,100 5,200 19,500 China (included in ROW) - 2,800 7,800 250 10,850
Q4 FY2020 Business Highlights • Demand for Life Science COVID-19 reagents remains strong • Diagnostics sees strong rebound over Q3 • Diagnostics clinical trials re-start, but still not to expectations ® • Locked design of Revogene COVID-19 assay and preparing EUA submission for the FDA Diagnostics Life ScienceQ4 FY2020 Business Highlights • Demand for Life Science COVID-19 reagents remains strong • Diagnostics sees strong rebound over Q3 • Diagnostics clinical trials re-start, but still not to expectations ® • Locked design of Revogene COVID-19 assay and preparing EUA submission for the FDA Diagnostics Life Science
FY2020 Fourth Quarter Earnings Summary ($000’s except Per Share Amounts) Adjusted (Non-GAAP) FY2020 FY2019 Change Highlights Revenue $64,153 $50,846 +26% • Revenues reflect solid COVID-19 contribution Gross Margin % 60% 57% +3 pts from Life Science and progress towards (1) Operating expenses $26,302 $21,619 +22% recovery of Diagnostics business. Ratio 41% 43% -2 pts • Life Science growth nearly 100% • Diagnostics down 11% to same quarter Operating income $12,029 $7,563 +59% last year, but up 38% to Q3 Margin % 19% 15% +4 pts Net earnings $8,289 $5,399 +54% • Gross margin increase reflects strength of Life EPS $0.19 $0.13 +46% Science scale for worldwide demand. GAAP FY2020 FY2019 Change • Increased operating expenses stems from $2M (2) increase in Diagnostics R&D; $0.5M increase in Operating expenses $28,857 $23,333 +24% purchase accounting and $1.4M increase in Operating income $9,474 $5,849 +62% incentive bonus. Margin % 15% 12% +3 pts Net earnings $6,493 $4,103 +58% EPS $0.15 $0.10 +50% (1) Includes Corporate Segment expenses of $2.7M in 2020 and $1.6M in 2019. (2) 2020 includes higher level of legal spend and an increase in the fair value of the GenePOC earnout obligation.FY2020 Fourth Quarter Earnings Summary ($000’s except Per Share Amounts) Adjusted (Non-GAAP) FY2020 FY2019 Change Highlights Revenue $64,153 $50,846 +26% • Revenues reflect solid COVID-19 contribution Gross Margin % 60% 57% +3 pts from Life Science and progress towards (1) Operating expenses $26,302 $21,619 +22% recovery of Diagnostics business. Ratio 41% 43% -2 pts • Life Science growth nearly 100% • Diagnostics down 11% to same quarter Operating income $12,029 $7,563 +59% last year, but up 38% to Q3 Margin % 19% 15% +4 pts Net earnings $8,289 $5,399 +54% • Gross margin increase reflects strength of Life EPS $0.19 $0.13 +46% Science scale for worldwide demand. GAAP FY2020 FY2019 Change • Increased operating expenses stems from $2M (2) increase in Diagnostics R&D; $0.5M increase in Operating expenses $28,857 $23,333 +24% purchase accounting and $1.4M increase in Operating income $9,474 $5,849 +62% incentive bonus. Margin % 15% 12% +3 pts Net earnings $6,493 $4,103 +58% EPS $0.15 $0.10 +50% (1) Includes Corporate Segment expenses of $2.7M in 2020 and $1.6M in 2019. (2) 2020 includes higher level of legal spend and an increase in the fair value of the GenePOC earnout obligation.
FY2020 Fourth Quarter Operating Segment Highlights ($000’s) Life Science Diagnostics FY2020 FY2019 Change FY2020 FY2019 Change (Adjusted Non-GAAP) (Adjusted Non-GAAP) Revenue $29,801 $33,399 -11% Revenue $34,352 $17,447 +97% Operating income ($2,515) $3,955 NMF Operating income $17,239 $5,170 +233% Margin % NMF 12% NMF Margin % 50% 30% +20 pts Diagnostics revenue by: Life Science revenue by: Technology: Technology: Molecular assays $4,648 $6,074 -23% Molecular reagents $22,703 $5,764 +294% Non-molecular assays 25,153 27,325 -8% Immunological reagents 11,649 11,683 - % Disease State: Region: GI (Gastrointestinal) $15,396 $16,958 -9% Americas $6,795 $5,092 +33% RI (Respiratory Illnesses) 3,030 5,380 -44% EMEA 17,115 7,241 +136% Blood Chemistry (Lead) 5,026 5,275 -5% ROW 10,442 5,114 +104% Other 6,349 5,786 +10% China (included in ROW) 2,478 3,266 -24% Product / Customer Highlights: Product / Customer Highlights: • Molecular assay revenues improved nearly 50% over Q3. • COVID-19 related reagent sales contributed $18M. • Respiratory impacted by lower volumes for influenza and GAS tests. • Shipments to industrial customers represented over 80% of revenues. • Blood-chemistry revenues improved nearly 50% over Q3. • Other included a higher contribution of royalties and modest growth in GBS and CMV tests.FY2020 Fourth Quarter Operating Segment Highlights ($000’s) Life Science Diagnostics FY2020 FY2019 Change FY2020 FY2019 Change (Adjusted Non-GAAP) (Adjusted Non-GAAP) Revenue $29,801 $33,399 -11% Revenue $34,352 $17,447 +97% Operating income ($2,515) $3,955 NMF Operating income $17,239 $5,170 +233% Margin % NMF 12% NMF Margin % 50% 30% +20 pts Diagnostics revenue by: Life Science revenue by: Technology: Technology: Molecular assays $4,648 $6,074 -23% Molecular reagents $22,703 $5,764 +294% Non-molecular assays 25,153 27,325 -8% Immunological reagents 11,649 11,683 - % Disease State: Region: GI (Gastrointestinal) $15,396 $16,958 -9% Americas $6,795 $5,092 +33% RI (Respiratory Illnesses) 3,030 5,380 -44% EMEA 17,115 7,241 +136% Blood Chemistry (Lead) 5,026 5,275 -5% ROW 10,442 5,114 +104% Other 6,349 5,786 +10% China (included in ROW) 2,478 3,266 -24% Product / Customer Highlights: Product / Customer Highlights: • Molecular assay revenues improved nearly 50% over Q3. • COVID-19 related reagent sales contributed $18M. • Respiratory impacted by lower volumes for influenza and GAS tests. • Shipments to industrial customers represented over 80% of revenues. • Blood-chemistry revenues improved nearly 50% over Q3. • Other included a higher contribution of royalties and modest growth in GBS and CMV tests.
FY2021 Fiscal Year Guidance Meridian Bioscience Consolidated net revenues: $290 to $310 million Adjusted operating margin: 23.5% to 24.5% Tax Rate: 23% to 24% Adjusted earnings per share*: $1.14 to $1.28 Diagnostics Life Science Net revenues: $140 to $150 million Net revenues: $150 to $160 million * Assumes 44.3M diluted share countFY2021 Fiscal Year Guidance Meridian Bioscience Consolidated net revenues: $290 to $310 million Adjusted operating margin: 23.5% to 24.5% Tax Rate: 23% to 24% Adjusted earnings per share*: $1.14 to $1.28 Diagnostics Life Science Net revenues: $140 to $150 million Net revenues: $150 to $160 million * Assumes 44.3M diluted share count
Meridian Growth Trends ($ in millions) Net Revenue Cash from Operations $300 $254 $214 $155 Life Science $201 $133 $63 $64 $48 $36 $35 $150 Diagnostics $145 $137 $121 (1) (2) (3) FY18 FY19 FY20 FY21E FY18 FY19 FY20 FY21E (1) Total does not sum due to rounding (2) Reflects the mid-point of the guidance range for illustrative purposes (3) Illustrative, not to scaleMeridian Growth Trends ($ in millions) Net Revenue Cash from Operations $300 $254 $214 $155 Life Science $201 $133 $63 $64 $48 $36 $35 $150 Diagnostics $145 $137 $121 (1) (2) (3) FY18 FY19 FY20 FY21E FY18 FY19 FY20 FY21E (1) Total does not sum due to rounding (2) Reflects the mid-point of the guidance range for illustrative purposes (3) Illustrative, not to scale
COVID-19 Shots on Goal DIAGNOSTICS LIFE SCIENCE For Tests to check for For Tests to check for SARS-CoV-2 Virus SARS-CoV-2 Antibodies Spike proteins Nucleocapsid ® Revogene SARS-CoV-2 Rapid Ag Immunoassay Reagent Master Mixes SARS-CoV-2 Antibody Pairs Recombinant Antigens (Working Towards EUA) (CE Marked – Working Towards EUA) 75+ approved assays 10+ approved assays 10+ approved assays Molecular Immunological Molecular ImmunologicalCOVID-19 Shots on Goal DIAGNOSTICS LIFE SCIENCE For Tests to check for For Tests to check for SARS-CoV-2 Virus SARS-CoV-2 Antibodies Spike proteins Nucleocapsid ® Revogene SARS-CoV-2 Rapid Ag Immunoassay Reagent Master Mixes SARS-CoV-2 Antibody Pairs Recombinant Antigens (Working Towards EUA) (CE Marked – Working Towards EUA) 75+ approved assays 10+ approved assays 10+ approved assays Molecular Immunological Molecular Immunological
Growth Drivers Post-COVID Life Science Diagnostics Menu expansion on four platforms Product Innovation Grow share in Leverage fully staffed Performance & Build off new and stronger H. pylori commercial organization Quality second IVD relationships from serology testing to noneGrowth Drivers Post-COVID Life Science Diagnostics Menu expansion on four platforms Product Innovation Grow share in Leverage fully staffed Performance & Build off new and stronger H. pylori commercial organization Quality second IVD relationships from serology testing to none
Diagnostics R&D Pipeline (as of 9/30/2020) Expected FY21 Development Feasibility Clinicals FDA FDA Submissions Liver MBT PMA Breath C. difficile Streptococcus Shiga Toxin C. difficile Campylobacter pneumoniae / Campylobacter Immunoassay Legionella COVID-19 EUA RI Panel COVID-19 EUA Molecular RI Panel GI Panel GI Panel Blood Hemoglobin PediaStat Analyzer Bilirubin Lead ChemistryDiagnostics R&D Pipeline (as of 9/30/2020) Expected FY21 Development Feasibility Clinicals FDA FDA Submissions Liver MBT PMA Breath C. difficile Streptococcus Shiga Toxin C. difficile Campylobacter pneumoniae / Campylobacter Immunoassay Legionella COVID-19 EUA RI Panel COVID-19 EUA Molecular RI Panel GI Panel GI Panel Blood Hemoglobin PediaStat Analyzer Bilirubin Lead Chemistry
Contact: mbi@meridianbioscience.comContact: mbi@meridianbioscience.com
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