Company Quick10K Filing
Quick10K
Meridian Bioscience
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$9.25 43 $394
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-Q 2018-12-31 Quarter: 2018-12-31
10-K 2018-09-30 Annual: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-Q 2017-12-31 Quarter: 2017-12-31
10-K 2017-09-30 Annual: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-Q 2016-12-31 Quarter: 2016-12-31
10-K 2016-09-30 Annual: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-Q 2015-12-31 Quarter: 2015-12-31
10-K 2015-09-30 Annual: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-Q 2014-12-31 Quarter: 2014-12-31
10-K 2014-09-30 Annual: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-Q 2013-12-31 Quarter: 2013-12-31
8-K 2019-11-07 Earnings, Regulation FD, Exhibits
8-K 2019-11-05 Officers, Exhibits
8-K 2019-10-01 Officers
8-K 2019-07-30 Earnings, Exhibits
8-K 2019-06-21 Officers, Exhibits
8-K 2019-06-06 Regulation FD, Exhibits
8-K 2019-06-03 M&A, Off-BS Arrangement, Regulation FD, Exhibits
8-K 2019-05-24 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-04-29 Enter Agreement, Regulation FD, Exhibits
8-K 2019-04-26 Enter Agreement, Earnings, Officers, Other Events, Exhibits
8-K 2019-04-02 Earnings, Officers, Exhibits
8-K 2019-01-24 Earnings, Regulation FD, Exhibits
8-K 2019-01-24 Shareholder Vote
8-K 2019-01-24 Shareholder Vote
8-K 2019-01-24 Earnings, Regulation FD, Exhibits
8-K 2019-01-07 Earnings, Exhibits
8-K 2018-12-06 Officers, Exhibits
8-K 2018-11-08 Earnings, Regulation FD, Exhibits
8-K 2018-10-26 Officers
8-K 2018-09-20 Officers, Amend Bylaw, Exhibits
8-K 2018-07-31 Earnings, Exhibits
8-K 2018-04-24 Earnings, Exhibits
8-K 2018-03-21 Other Events, Exhibits
8-K 2018-02-22 Officers, Exhibits
8-K 2018-01-25 Earnings, Shareholder Vote, Exhibits
IDXX Idexx Laboratories 24,560
QDEL Quidel 2,331
LNTH Lantheus Holdings 848
NTLA Intellia Therapeutics 645
QTNT Quotient 637
OXFD Oxford Immunotec Global 371
ICCC Immucell 39
VRML Vermillion 38
ACHV Achieve Life Sciences 13
NAVB Navidea Biopharmaceuticals 5
VIVO 2019-06-30
Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-31.1 d754410dex311.htm
EX-31.2 d754410dex312.htm
EX-32 d754410dex32.htm

Meridian Bioscience Earnings 2019-06-30

VIVO 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q
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Table of Contents
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Quarterly Period Ended June 30, 2019
OR
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
Securities registered pursuant to Section 12(b) of the Act:
         
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Common Stock, no par value
 
VIVO
 
NASDAQ Global Select Market
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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  
    No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  
    No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
             
Large accelerated filer
 
 
Accelerated filer
 
             
Non-accelerated filer
 
 
Smaller reporting company
 
             
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.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act).    Yes  
    No  
 
 
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, 2019
Common Stock, no par value
 
42,711,496
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents
 
MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
TABLE OF CONTENTS TO QUARTERLY REPORT ON FORM 10-Q
             
 
 
Page(s)
 
PART I.
     
 
             
Item 1.
     
 
             
     
1
 
             
     
2
 
             
     
3
 
             
     
4-5
 
             
     
6
 
             
     
7-19
 
             
Item 2.
     
20-27
 
             
Item 3.
     
27
 
             
Item 4.
     
27-28
 
             
PART II.
     
 
             
Item 1.
     
28
 
             
Item 1A.
     
28
 
             
Item 6.
     
28
 
             
 
   
29
 
 
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains 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” 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 and revenue, 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 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. 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.
 
 
 
Table of Contents
 
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,
 
 
2019
   
2018
   
2019
   
2018
 
NET REVENUES
  $
48,440
    $
51,737
    $
150,168
    $
160,471
 
COST OF SALES
   
20,181
     
19,775
     
60,999
     
61,930
 
                                 
GROSS PROFIT
   
28,259
     
31,962
     
89,169
     
98,541
 
                                 
OPERATING EXPENSES
   
     
     
     
 
Research and development
   
4,594
     
4,264
     
12,294
     
13,159
 
Selling and marketing
   
6,747
     
8,502
     
21,221
     
25,963
 
General and administrative
   
8,002
     
8,380
     
24,288
     
26,470
 
Acquisition-related costs
   
473
     
—  
     
1,445
     
—  
 
Restructuring costs
   
1,801
     
913
     
1,701
     
5,105
 
Litigation costs
   
178
     
1,168
     
1,370
     
3,370
 
                                 
Total operating expenses
   
21,795
     
23,227
     
62,319
     
74,067
 
                                 
OPERATING INCOME
   
6,464
     
8,735
     
26,850
     
24,474
 
                                 
OTHER INCOME (EXPENSE)
   
     
     
     
 
Interest income
   
194
     
109
     
547
     
271
 
Interest expense
   
(448
)    
(375
)    
(1,158
)    
(1,149
)
Other, net
   
268
     
151
     
(38
)    
(94
)
                                 
Total other income (expense)
   
14
     
(115
)    
(649
)    
(972
)
                                 
EARNINGS BEFORE INCOME TAXES
   
6,478
     
8,620
     
26,201
     
23,502
 
                                 
INCOME TAX PROVISION
   
1,399
     
1,795
     
5,922
     
5,087
 
                                 
NET EARNINGS
  $
5,079
    $
6,825
    $
20,279
    $
18,415
 
BASIC EARNINGS PER COMMON SHARE
  $
0.12
    $
0.16
    $
0.48
    $
0.44
 
DILUTED EARNINGS PER COMMON SHARE
  $
0.12
    $
0.16
    $
0.47
    $
0.43
 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC
   
42,639
     
42,349
     
42,526
     
42,307
 
EFFECT OF DILUTIVE STOCK OPTIONS AND RESTRICTED SHARE UNITS
   
271
     
409
     
381
     
405
 
                                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED
   
42,910
     
42,758
     
42,907
     
42,712
 
ANTI-DILUTIVE SECURITIES:
   
     
     
     
 
Common share options and restricted share units
   
1,215
     
995
     
1,073
     
1,009
 
                                 
DIVIDENDS DECLARED PER COMMON SHARE
  $
—  
    $
0.125
    $
0.250
    $
0.375
 
                                 
 
 
 
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
Page 1
 
 
 
Table of Contents
 
MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(dollar amounts in thousands)
                                 
 
Three Months Ended
   
Nine Months Ended
 
 
June 30,
   
June 30,
 
 
2019
   
2018
   
2019
   
2018
 
NET EARNINGS
  $
5,079
    $
6,825
    $
20,279
    $
18,415
 
Other comprehensive income (loss):
   
     
     
     
 
Foreign currency translation adjustment
   
1,692
     
(1,912
)    
1,353
     
(695
)
Unrealized gain (loss) on cash flow hedge
   
(297
)    
109
     
(1,184
)    
874
 
Income taxes related to items of other comprehensive income
   
222
     
(28
)    
445
     
(247
)
                                 
Other comprehensive income (loss), net of tax
   
1,617
     
(1,831
)    
614
     
(68
)
                                 
COMPREHENSIVE INCOME
  $
6,696
    $
4,994
    $
20,893
    $
18,347
 
 
 
 
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
Page 2
 
 
 
Table of Contents
 
MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(dollar amounts in thousands)
Nine Months Ended June 30,
 
2019
   
2018
 
CASH FLOWS FROM OPERATING ACTIVITIES
   
     
 
Net earnings
  $
20,279
    $
18,415
 
Non-cash
items included in net earnings:
   
     
 
Depreciation of property, plant and equipment
   
3,984
     
3,320
 
Amortization of intangible assets
   
2,778
     
2,732
 
Amortization of deferred instrument costs
   
—  
     
581
 
Stock-based compensation
   
2,728
     
2,882
 
Deferred income taxes
   
(852
)    
(71
)
Loss on disposition and write-down of fixed assets
 
 
220
 
 
 
—  
 
Change in the following, net of acquisition:
   
     
 
Accounts receivable
   
1,014
     
(52
)
Inventories
   
(67
)    
(4,118
)
Prepaid expenses and other current assets
   
(1,849
)    
(2,106
)
Accounts payable and accrued expenses
   
(1,703
)    
2,967
 
Income taxes payable
   
1,402
     
(1,003
)
Other, net
   
412
     
35
 
                 
Net cash provided by operating activities
   
28,346
     
23,582
 
                 
CASH FLOWS FROM INVESTING ACTIVITIES
   
     
 
Purchase of property, plant and equipment
   
(3,314
)    
(3,340
)
Acquisition of GenePOC business
   
(45,239
)    
—  
 
                 
Net cash used for investing activities
   
(48,553
)    
(3,340
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES
   
     
 
Dividends paid
   
(10,612
)    
(15,870
)
Proceeds from revolving credit facility
   
75,824
     
—  
 
Payment of debt issuance costs
 
 
(489
)
 
 
—  
 
Payments on term loan
   
(50,250
)    
(3,375
)
Proceeds and tax benefits from exercises of stock options
   
614
     
183
 
                 
Net cash provided by (used for) financing activities
   
15,087
     
(19,062
)
                 
Effect of Exchange Rate Changes on Cash and Equivalents and Restricted Cash
   
(451
)    
(322
)
                 
Net Increase (Decrease) in Cash and Equivalents and Restricted Cash
   
(5,571
)    
858
 
Cash and Equivalents and Restricted Cash at Beginning of Period
   
60,763
     
58,072
 
                 
Cash and Equivalents and Restricted Cash at End of Period
  $
55,192
    $
58,930
 
                 
                 
Cash and Equivalents
  $
55,192
    $
57,930
 
Restricted Cash
   
—  
     
1,000
 
                 
Cash and Equivalents and Restricted Cash at End of Period
  $
55,192
    $
58,930
 
                 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
Page 3
 
 
Table of Contents
 
 
MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(dollar amounts in thousands)
ASSETS
                 
 
June 30,
   
 
 
2019
   
September 30,
 
 
(Unaudited)
   
2018
 
CURRENT ASSETS
   
     
 
Cash and equivalents
  $
55,192
    $
59,763
 
Accounts receivable, less allowances of $421 and $310
   
31,995
     
32,336
 
Inventories
   
43,305
     
41,993
 
Prepaid expenses and other current assets
   
6,897
     
4,961
 
                 
Total current assets
   
137,389
     
139,053
 
                 
PROPERTY, PLANT AND EQUIPMENT, at Cost
   
     
 
Land
   
1,157
     
1,160
 
Buildings and improvements
   
32,430
     
32,444
 
Machinery, equipment and furniture
   
63,344
     
50,606
 
Construction in progress
   
1,292
     
1,631
 
                 
Subtotal
   
98,223
     
85,841
 
Less: accumulated depreciation and amortization
   
66,398
     
55,846
 
                 
Net property, plant and equipment
   
31,825
     
29,995
 
                 
OTHER ASSETS
   
     
 
Goodwill
   
90,107
     
54,637
 
Other intangible assets, net
   
62,001
     
23,113
 
Restricted cash
   
  
     
1,000
 
Deferred instrument costs, net
   
—  
     
1,239
 
Fair value of interest rate swap
   
—  
     
1,722
 
Deferred income taxes
   
125
     
130
 
Other assets
   
989
     
488
 
                 
Total other assets
   
153,222
     
82,329
 
                 
TOTAL ASSETS
  $
322,436
    $
251,377
 
                 
 
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
Page 4
 
 
 
Table of Contents
 
MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(dollar amounts in thousands)
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
                 
 
June 30,
   
 
 
2019
   
September 30,
 
 
(Unaudited)
   
2018
 
CURRENT LIABILITIES
   
     
 
Accounts payable
  $
8,381
    $
6,260
 
Accrued employee compensation costs
   
6,795
     
7,263
 
Other accrued expenses
   
3,214
     
5,065
 
Current portion of long-term debt
   
—  
     
5,250
 
Income taxes payable
   
1,432
     
335
 
                 
Total current liabilities
   
19,822
     
24,173
 
                 
NON-CURRENT
LIABILITIES
   
     
 
Post-employment benefits
   
2,384
     
2,646
 
Long-term debt
   
75,824
     
44,930
 
Long-term income taxes payable
   
736
     
441
 
Deferred income taxes
   
2,917
     
3,769
 
Acquisition consideration
   
32,200
     
—  
 
                 
Total
non-current
liabilities
   
114,061
     
51,786
 
                 
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, 42,670,805 and 42,399,962 shares issued, respectively
   
—  
     
—  
 
Additional
paid-in
capital
   
132,311
     
129,193
 
Retained earnings
   
59,005
     
49,602
 
Accumulated other comprehensive loss
   
(2,763
)    
(3,377
)
                 
Total shareholders’ equity
   
188,553
     
175,418
 
                 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $
322,436
    $
251,377
 
                 
 
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
Page 5
 
 
 
Table of Contents
 
MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)
(dollar and share amounts in thousands, except per share data)
 
                                         
 
Common
Shares
Issued
   
Additional
Paid-In

Capital
   
Retained
Earnings
   
Accumulated Other
Comprehensive
Income (Loss)
   
Total
Shareholders’
Equity
 
THREE MONTHS ENDED JUNE 30, 2019
   
     
     
     
     
 
Balance at March 31, 2019
   
42,515
    $
131,951
   
54,074
    $
(4,380
)   $
181,645
 
Conversion of restricted share units and exercise of stock options
   
156
     
—  
     
—  
     
—  
     
—  
 
Stock compensation expense
   
—  
     
360
     
—  
     
—  
     
360
 
Net earnings
   
—  
     
—  
     
5,079
     
—  
     
5,079
 
Foreign currency translation adjustment
   
—  
     
—  
     
—  
     
1,692
     
1,692
 
Hedging activity, net of tax
   
—  
     
—  
     
—  
     
(223
)    
(223
)
Adoption of ASU
2018-02
   
—  
     
—  
     
(148
)    
148
     
—  
 
                                         
Balance at June 30, 2019
   
42,671
    $  
132,311
    $
59,005
    $
(2,763
)   $
188,553
 
                                         
THREE MONTHS ENDED JUNE 30, 2018
   
     
     
     
     
 
Balance at March 31, 2018
   
42,344
    $
127,583
    $
47,936
    $
(1,183
)   $
174,336
 
Cash dividends paid - $0.125 per share
   
—  
     
—  
     
(5,293
)    
—  
     
(5,293
)
Conversion of restricted share units and exercise of stock options
   
14
     
183
     
—  
     
—  
     
183
 
Stock compensation expense
   
—  
     
907
     
—  
     
—  
     
907
 
Net earnings
   
—  
     
—  
     
6,825
     
—  
     
6,825
 
Foreign currency translation adjustment
   
—  
     
—  
     
—  
     
(1,912
)    
(1,912
)
Hedging activity, net of tax
   
—  
     
—  
     
—  
     
81
     
81
 
                                         
Balance at June 30, 2018
   
42,358
    $
128,673
    $
49,468
    $
(3,014
)   $
175,127
 
                                         
NINE MONTHS ENDED JUNE 30, 2019
   
     
     
     
     
 
Balance at September 30, 2018
   
42,400
    $
129,193
    $
49,602
    $
(3,377
)   $
175,418
 
Cash dividends paid - $0.250 per share
   
—  
     
—  
     
(10,612
)    
—  
     
(10,612
)
Conversion of restricted share units and exercise of stock options
   
271
     
390
     
—  
     
—  
     
390
 
Stock compensation expense
   
—  
     
2,728
     
—  
     
—  
     
2,728
 
Net earnings
   
—  
     
—  
     
20,279
     
—  
     
20,279
 
Foreign currency translation adjustment
   
—  
     
—  
     
—  
     
1,353
     
1,353
 
Hedging activity, net of tax
   
—  
     
—  
     
—  
     
(887
)    
(887
)
Adoption of ASU
2014-09
   
—  
     
—  
     
(116
)    
—  
     
(116
)
Adoption of ASU
2018-02
   
—  
     
—  
     
(148
)    
148
     
—  
 
                                         
Balance at June 30, 2019
   
42,671
    $
132,311
    $
59,005
    $
(2,763
)   $
188,553
 
                                         
NINE MONTHS ENDED JUNE 30, 2018
   
     
     
     
     
 
Balance at September 30, 2017
   
42,207
    $
125,608
    $
46,923
    $
(2,946
)   $
169,585
 
Cash dividends paid - $0.375 per share
   
—  
     
—  
     
(15,870
)    
—  
     
(15,870
)
Conversion of restricted share units and exercise of stock options
   
151
     
183
     
—  
     
—  
     
183
 
Stock compensation expense
   
—  
     
2,882
     
—  
     
—  
     
2,882
 
Net earnings
   
—  
     
—  
     
18,415
     
—  
     
18,415
 
Foreign currency translation adjustment
   
—  
     
—  
     
—  
     
(695
)    
(695
)
Hedging activity, net of tax
   
—  
     
—  
     
—  
     
627
     
627
 
                                         
Balance at June 30, 2018
   
42,358
    $
128,673
    $
49,468
    $
(3,014
)   $
175,127
 
                                         
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
Page 6
 
 
 
Table of Contents
 
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, 2019, the results of its operations for the three and nine month periods ended June 30, 2019 and 2018, and its cash flows for the nine month periods ended June 30, 2019 and 2018. These statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s fiscal 2018 Annual Report on Form
10-K.
 Financial information as of September 30, 2018 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 summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of the Company’s fiscal 2018 Annual Report on Form 10-K and should be referred to for a description of the Company’s current significant accounting policies, with the exception of Revenue Recognition and Fair Value Measurements, which are set forth below.
Revenue Recognition –
Adoption of New Standard
On October 1, 2018, we adopted ASU No.
 2014-09,
Revenue from Contracts with Customers
, using the modified retrospective transition method applied to those contracts that were not completed as of that date. Results for reporting periods beginning on or after October 1, 2018 are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with previously applicable authoritative guidance.
Upon adoption, we recorded a reduction of $116 to the opening balance of retained earnings as of October 1, 2018. This adjustment is related to writing off the book value of clinical diagnostic testing instruments located at customers for which there is no contractual arrangement for the instrument to be returned to the Company. Instruments placed with customers under an agreement to return the instrument to the Company were reclassified to machinery and equipment. Prior to adoption of the new guidance, all instruments placed with customers were capitalized and amortized over an estimated three-year utilization period, with the net balance reflected as deferred instrument costs.
 
Page 7
 
 
 
Table of Contents
 
The following table summarizes the impact of the new revenue standard on our opening balance sheet:
                         
 
Balance at
September 30,
2018
   
New Revenue
Standard
Adjustment
   
Balance at
October 1,
2018
 
PROPERTY, PLAN AND EQUIPMENT
 
 
 
 
 
 
 
 
 
 
 
 
Machinery, equipment and furniture
  $
50,606
    $
8,696
    $
59,302
 
Accumulated depreciation and amortization
   
(55,846
)    
(7,611
)