Meridian Bioscience Reports First Quarter 2019 Operating Results, Declares Regular First Quarter Cash Dividend, and Provides Updated Fiscal 2019 Guidance

CINCINNATI, Jan. 24, 2019 (GLOBE NEWSWIRE) -- Meridian Bioscience, Inc. (VIVO) today announced financial results for the first quarter ended December 31, 2018.

First Quarter 2019 Highlights:

• Total revenue decreased 1.5% to $51.5 million, as compared to $52.3 million in the first quarter of fiscal 2018 (1% decrease in constant-currency)
• Reported operating income of $10.6 million (including $0.6 million of costs associated with litigation), an increase of 31% from the first quarter of fiscal 2018, which included $1.5 million of costs associated with restructuring activities and litigation
• Reported GAAP EPS of $0.19 per diluted share and non-GAAP EPS of $0.20 per diluted share, increases of 27% and 33%, respectively, from the first quarter of fiscal 2018 (see non-GAAP financial measure reconciliation below)
• Declared regular quarterly cash dividend of $0.125 per share
• Received FDA clearance for our new Alethiaâ„¢ CMV Molecular Amplification Test (formerly, the illumigene brand) 
• Submitted regulatory documents to FDA in connection with efforts to reinstate our blood chemistry products’ venous blood claims

First Quarter 2019 Results
Total revenue for the first quarter of fiscal 2019 decreased 1.5% to $51.5 million, compared to $52.3 million in the first quarter of 2018.  This decrease was primarily driven by our Diagnostics business unit revenues decreasing 2% from $37.5 million to $36.7 million, as volume pressures in a number of our molecular products, and pricing in certain gastrointestinal lines more than offset growth in blood-lead chemistry products.  Sales in our Life Science business unit were relatively flat at $14.8 million, reflecting the effects of inconsistent order patterns with a number of our multi-national IVD manufacturing customers and broadly in China.

Operating income for the fiscal 2019 first quarter increased $2.5 million to $10.6 million from the first quarter of fiscal 2018.  This increase primarily results from the combined effects of a $0.9 million decrease in restructuring and litigation costs, and a $2.0 million decrease in other operating expenses.  Excluding the effects of the restructuring and litigation costs in each period, operating income increased 17% over the fiscal 2018 first quarter to $11.1 million.  R&D spending was down in the quarter compared to first quarter of fiscal 2018, which included clinical trial expenses for the recently-cleared congenital CMV assay.  Sales and marketing expenses in the quarter were down due to fiscal 2018 organization streamlining initiatives, particularly in our Life Science business, as well as lower sales commissions as a result of lower revenues.  General and administrative expenses were down in the quarter, also due in large part to the effects of organizational streamlining initiatives in fiscal 2018.  Fiscal first quarter operating income in Diagnostics increased 3% despite the decrease in revenues because of lower operating expenses.  Operating income for the fiscal first quarter was up 74% in Life Science, driven by the continued benefit of fiscal 2018 restructuring activities, including a lower-cost commercial organization, as well as overall productivity improvements. 

Net earnings for the first quarter of fiscal 2019 totaled $8.1 million, or $0.19 per diluted share, as compared to $6.3 million, or $0.15 per diluted share, for the first quarter of fiscal 2018.  On a non-GAAP basis, earnings were $8.6 million, or $0.20 per diluted share, increases of 31% and 33%, respectively.  Non-GAAP basis excludes the effect of litigation costs in both the fiscal 2019 and 2018 periods, and in fiscal 2018, also excludes restructuring costs and certain one-time tax effects of the U.S. Tax Cuts and Jobs Act (the “tax reform act”) enacted in December 2017 (see non-GAAP financial measure reconciliation below).

Jack Kenny, Chief Executive Officer, commented, “While revenue growth in the first quarter was below our expectations, the realignment and efficiency actions taken in fiscal 2018, combined with continued expense management discipline, allowed us to deliver strong earnings growth and profit margins.  We are committed to re-invest in the business and intend to increasingly re-deploy such savings into future growth initiatives, including strengthening our molecular product portfolio. We are in the early stages of executing our strategy, including re-positioning our Diagnostics business for sustainable topline growth. Our molecular diagnostics products are experiencing more competitive pressure than we anticipated, and a very high volume of flu and other respiratory illness testing in the second quarter of fiscal 2018 will make for difficult comparisons for our Diagnostics business unit in the second quarter. We believe new commercial and product initiatives already in place in our Diagnostics business will yield positive results and increasingly contribute to financial results through fiscal 2019.  These factors, combined with our continued expectation for strong, but periodically inconsistent, growth in our Life Science business, are reflected in our updated guidance for fiscal 2019.”

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