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Meridian Bioscience Q4 Revenues Climb 19 Percent

This story has been updated with information from the company's earnings call. 

NEW YORK – Meridian Bioscience reported on Friday that its fiscal fourth quarter revenues increased 19 percent year over year.

For the three months ended Sept. 30, the firm reported revenues of $76.2 million, up from $64.2 million a year ago.

Meridian reported Q4 diagnostics revenues of $34.3 million, up 15 percent year over year from $29.8 million. Within diagnostics, the firm reported molecular assay revenues of $5.7 million, up 22 percent year over year from $4.7 million, and non-molecular assays revenues of $28.6 million, up 14 percent year over year from $25.2 million, despite impacts from the recall of Meridian's LeadCare product, which cost $5.6 million.

Q4 revenues for the firm's life sciences segment were $41.9 million, up 22 percent from the $34.4 million of the prior-year quarter. It included $23.3 million in revenues from COVID-19 related products — $18.1 million from molecular products and $5.2 million from immunological products.

Within life sciences, immunological reagents were up 34 percent to $15.5 million from $11.6 million. Molecular reagents revenues, meanwhile, grew 16 percent to $26.4 million from $22.7 million a year ago. 

During the quarter, Meridian closed its $20 million acquisition of the North American BreathTek business from Otsuka America Pharmaceutical. On a conference call to discuss Meridian's financial results, CEO Jack Kenny said the firm expects $20 million in annual revenues from the business.

The firm also announced this week that it received Emergency Use Authorization from the US Food and Drug Administration for its Revogene SARS-CoV-2 test, which was resubmitted to the FDA in June after Meridian withdrew the test to conduct additional studies.

Kenny said that the firm expects to begin shipping Revogene products in the next few weeks as Meridian finalizes the labeling and works with customers to validate the test.

Revogene's total installed base is 359 instruments, and Kenny said installations of new instruments remained slow as customers waited on the EUA for the SARS-CoV-2 test. During the quarter, the firm saw a pickup in new orders, but it was still below expectations, Kenny said.

He added that the build-out of new manufacturing lines is "going well," with expectations to have salable products from the first manufacturing line in Cincinnati by the end of the month.

The company reported Q4 net earnings of $6.7 million, or $.15 per share, compared to $6.5 million, or $.15 per share in Q4 2020. On an adjusted basis, Meridian reported EPS of $.23.

In Q4, the firm’s R&D costs dropped 13 percent to $6.1 million from $7.0 million in Q4 2020, and its SG&A costs increased 2 percent to $19.7 million from $19.3 million.

Meridian ended fiscal 2021 with $49.8 million in cash and cash equivalents.

For full fiscal year 2021, Meridian's revenues increased 25 percent year over year to $317.9 million from $253.7 million. Diagnostic revenues increased 5 percent to $127.8 million from $121.1 million a year ago.

Life sciences revenues grew 43 percent to $190.1 million from $132.5 million a year ago, which Meridian called "record net revenues." The firm added that $111.9 million came from COVID-19-related products for immunological and molecular tests. COVID-19-relate molecular product revenues were $92.6 million, while COVID-19-related immunological product revenues were $19.4 million.

Meridian CFO Bryan Baldasare said on the call that the primary driver of full year revenues was growth in the life sciences segment and that the firm saw "soft demand" for its respiratory products.

Meridian Bioscience reported net earnings for the year of $71.4 million, or $1.62 per share, compared to net earnings of $46.2 million, or $1.08 per share, in 2020. On an adjusted basis, the firm reported 2021 EPS of $1.66.

The firm's R&D costs for the year grew 1 percent to $23.9 million from $23.7 million, and its SG&A costs increased 8 percent to $76.3 million from $70.8 million. The firm also had $2.8 million in legal expenses related to a Department of Justice investigation into its Magellan LeadCare business.

In FY 2022, the firm expects consolidated revenues in the range of $285 million to $300 million and adjusted EPS in the range of $.98 to $1.08.

Diagnostic revenues are expected to be in the range of $145 million to $150 million for 2022. Diagnostic revenues are expected to be higher in the second half of the year, due to the firm's assumption that it will begin shipping LeadCare products again in April 2022, Meridian said.

Kenny also expanded on the reason for the LeadCare recall, noting that there was a supply chain issue with the plastic tubes used in the test kit that contaminated the kits. He said Meridian was testing alternate plastic and glass tubes to include in the new kits.

Baldasare added that Meridian expects diagnostics revenue to be moderately higher in the second half of fiscal 2022 due to LeadCare coming back online.

Life science revenues are projected to be in the range of $140 million to $150 million, due to an expectation of double-digit growth for product sales not related to COVID-19, offset by a reduction in demand for its products due to COVID-19 testing decreases. Meridian said it also expects the impact from COVID-19-related sales to be higher in the first half of the fiscal year, due to the respiratory illness season.

In morning trading on the Nasdaq, Meridian's shares were up nearly 5 percent to $20.25.