NEW YORK – Meridian Bioscience reported on Thursday that its fiscal fourth quarter revenues decreased 4 percent due to competitive pressures in the diagnostics market and pricing declines in its gastrointestinal products.
For the three months ended Sept. 30, the firm reported revenues of $50.8 million down from $53.1 million a year ago. It still beat the average consensus Wall Street estimate of $50.6 million.
Meridian reported Q4 diagnostics revenues of $33.4 million, down 9 percent year over year from $36.8 million.
Within diagnostics, the firm reported molecular assays revenues of $6.1 million, down 21 percent year over year from $7.7 million, and immunoassays and blood chemistry assays revenues of $27.3 million, down 6 percent year over year from $29.1 million.
During a conference call to discuss the financial results, Meridian CFO Bryan Baldasare noted product pricing, particularly for H. pylori products, had an unfavorable impact, contributing to an 8 percent revenue decline in H. pylori products for the year. He also noted that competitive pressures in C. difficile and flu-borne products negatively impacted revenues, with both segments facing significant volume declines.
Meridian CEO Jack Kenny said in a statement that conversions from the Alethia molecular system to the Revogene system exceeded expectations, and that the Revogene platform has helped the company slow its account losses. Kenny also said on the call that the company placed about 60 instruments during the quarter, with the goal of 90 more instruments installed by the end of fiscal Q3 2020.
Earlier this week, the company announced it had submitted its Curian analyzer and HpSA assay for H. pylori infection to the US Food and Drug Administration for approval.
Q4 revenues for the firm's life sciences segment were $17.4 million, up 7 percent year over year from $16.3 million. Kenny noted that the business had its best revenue growth of the year during this quarter, driven partly by orders for immunological reagents and strong growth from China.
The company reported Q4 net earnings of $4.1 million, or $.10 per share, compared to $5.4 million, or $.13 per share in Q4 2018. On an adjusted basis, Meridian reported EPS of $.13, beating analysts' average estimate of $.09 per share.
In Q4, the firm’s R&D costs rose 58 percent to $5.7 million from $3.6 million in Q4 2018, and its SG&A costs fell 5 percent to $15.9 million from $16.8 million. The firm attributed the increase in R&D costs to its acquisition of the GenePOC business, along with development of two Revogene assays and completion of clinical trials for the Curian assay.
The Cincinnati-based company also reported its restructuring costs decreased sharply to $1.1 million in the recently completed quarter from $3.6 million a year ago.
Meridian ended the year with $62.4 million in cash and cash equivalents.
For full fiscal year 2019, Meridian's revenues fell 6 percent year over year to $201 million from $213.6 million, beating the average analyst estimate of $200.8 million. Diagnostic revenues decreased 9 percent to $136.7 million from $150.5 million a year ago. Life sciences revenues grew 2 percent to $64.3 million from $63.1 million a year ago.
The firm reported net earnings for the year of $24.4 million, or $.57 per share, compared to net earnings of $23.9 million, or $.56 per share, in 2018. On an adjusted basis, the firm reported 2019 EPS of $.68, beating the average analyst estimate for EPS of $.64.
The firm's R&D costs for the year rose 7 percent to $18 million from $16.8 million, and its SG&A costs fell 11 percent to $61.5 million from $69.3 million.
In FY 2020, the firm expects revenues to stay flat or decrease by up to 3 percent and adjusted EPS in the range of $.28 to $.34. Prior to the release of the financial results, analysts on average were expecting $201.8 million in FY 2020 revenues, and EPS of $.51.
Diagnostic revenues are expected to grow in the mid-single digits year over year, while life science revenues are expected to grow between 50 to 100 basis points year over year. Revenues from the Revogene product are expected to be in the mid- to high-single-digit million range, from $6 million to $9 million, Kenny said.
He noted on the call that in fiscal 2020 Meridian will significantly invest in new diagnostic product development, with clinical trials for six assays across three platforms planned to start. Kenny also mentioned the commercial launch of the Curian analyzer and HpSA assay which is planned for 2020, pending FDA approval. Kenny said the company expects multiple products to launch in 2021 and 2022 but didn't elaborate.
In morning trading on the Nasdaq, Meridian's shares were down 3 percent to $9.85.