Meridian Bioscience, Inc. (NASDAQ: VIVO) today declared financial results for the third quarter ended June 30, 2022.
Third Quarter Fiscal 2022 Highlights (Comparison to Third Quarter Fiscal 2021):
- Consolidated net revenues totaled $67.8 million, an increase of 7% year-over-year
- Diagnostics segment net revenues increased 36% year-over-year to a record $42.4 million
- Life Science segment delivered net revenues of $25.4 million, a decrease of 22%
Third Quarter Fiscal 2022 Results (Comparison to Third Quarter Fiscal 2021)
Consolidated net revenues for the third quarter of fiscal 2022 were $67.8 million, up 7% from $63.5 million in last year’s third quarter. Diagnostics segment net revenues were up 36% year-over-year, while Life Science segment net revenues were 22% lower year-over-year. Our Diagnostics segment’s net revenues from molecular products increased 11% compared to the prior year third quarter, and net revenues from non-molecular assay products increased 40%. Key contributors to the non-molecular assay year-over-year increase include the addition of the BreathTek® product line acquired in July 2021 and the increase in sales of LeadCare® products that were not shipping for a portion of the third quarter of fiscal 2021 due to a product recall. The Life Science segment experienced a significant shift in net revenues product mix from molecular reagents (62% decrease) to immunological reagents (48% increase), driven by lower overall demand in fiscal 2022 relative to the strong molecular test demand experienced in fiscal 2021 driven largely by COVID-19 testing.
Reported consolidated operating loss for the third quarter of fiscal 2022 was $6.7 million compared to operating income of $15.7 million in the third quarter of fiscal 2021. The consolidated operating loss was primarily driven by a $10 million estimated expense recorded in the third quarter related to the possible settlement of the previously disclosed and ongoing U.S. Department of Justice legal matter. Operating expenses also included: (i) increased selling and marketing costs in both the Diagnostics and Life Science segments, due, in part, to filling certain open positions and easing of COVID-19 related travel and meeting restrictions; (ii) increased general and administrative costs due, in part, to increased intangible asset amortization resulting from the acquisition of the BreathTek® business in July 2021; (iii) higher acquisition and transaction related expenses in connection with the recently signed definitive merger agreement discussed below; and (iv) the effect of the fiscal 2021 third quarter upward adjustment to the contingent consideration related to the fiscal 2019 acquisition of GenePOC Inc. On an adjusted basis, consolidated operating income was $9.4 million, reflecting a margin of 14%, down from the prior year quarter’s $12.9 million and 20% margin (see non-GAAP financial measure reconciliation below). This year-over-year decrease was driven primarily by the decreased level of net revenues and gross margins within the Life Science segment, which resulted from the overall decline in COVID-19 related net revenues and the significant shift in product mix mentioned above.
Jack Kenny, Chief Executive Officer, commented, “The Diagnostics segment continues to perform well, delivering a third quarter with record net revenues of $42.4 million. As expected, Life Science segment net revenues declined, with reduced demand for COVID-19 related products.”
At June 30, 2022, cash and cash equivalents were $83.5 million and the Company had $175.0 million of available borrowing capacity under its $200.0 million commercial bank credit facility. The Company’s obligations under the facility totaled $25.0 million as of June 30, 2022.
Fiscal 2022 Guidance & Conference Call
As announced on July 7, 2022, the Company entered into a definitive merger agreement whereby a newly formed affiliate vehicle of a Consortium, consisting of SD Biosensor, Inc. (“SDB”) (KOSE: A137310) and SJL Partners LLC (“SJL”) (collectively, the “Consortium”), will acquire Meridian. The transaction is expected to close in the fourth calendar quarter of 2022, subject to approval by Meridian shareholders, receipt of required regulatory approvals, the absence of specified material adverse outcomes of the Company’s previously disclosed and ongoing investigation by the U.S. Department of Justice, and other customary closing conditions.
SOURCE Meridian Bioscience, Inc.
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