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Meridian Reports 1 Percent Drop in Q1 Revenues; Mixed Results in Dx, Life Science Segments

NEW YORK (GenomeWeb News) — Meridian Bioscience today reported a 1 percent year-over-year drop in fiscal 2014 first-quarter revenues with mixed results in both its Illumigene molecular diagnostics and core life science businesses.

For the three months ended Dec. 31, Meridian reported revenues of $44.8 million, compared to $45.4 million in the year-ago period and well short of the consensus analyst estimate of $49 million.

As Meridian noted last week when it released preliminary fiscal Q1 results, the drop in revenues was a result of several factors.

"Delays in shipments, ordering patterns, and a seasonal shift in influenza negatively impacted our core life science, foodborne, and respiratory product categories, respectively, and are expected to rebound during the second quarter," Meridian CEO John Kraeutler said in a statement this week.

Revenues from Meridian's diagnostics segment edged down to $34.8 million from $35.7 million in the year-ago period.

Within this business segment, revenues from Meridian's Illumigene line of isothermal amplification-based molecular diagnostic products increased 15 percent year over year, with the greatest contributions coming from its tests for Group A and Group B streptococci. This was offset, however, by its molecular Clostridium difficile test contributing at a lesser rate than expected, the company said.

"We believe one of the root causes of this weakness is related to reduced hospital admissions and declining disease incidence rates in hospitals," Kraeutler said. "As a result, our sales and marketing efforts are being stepped up with those products that are more suited to testing of ambulatory patients rather than hospital inpatients. Specifically, we are focusing on the testing of those persons undergoing prenatal screening as well as those suffering symptoms of upper respiratory infections and gastrointestinal distress."

Meridian said that it added 21 new Illumigene customers in Q1, a similar number as compared to the same period last year; and added 36 new tests on installed Illumipro systems. The company also noted that Illumigene Pertussis is currently awaiting clearance from the US Food and Drug Administration, and clinical trials for its CT/NG test are set to begin this quarter.

Meantime, Illumigene's life science business logged revenues of $10 million in Q1, a 3 percent uptick from $9.7 million in the year-ago period.

Meridian noted that its Bioline unit, which primarily sells reagents for PCR and other molecular biology techniques, achieved a 16 percent year-over-year increase offset by a 7 percent decline in core life science revenues.

Meridian reported Q1 net earnings of $7.4 million, or $.18 per share, compared to $8.5 million, or $.20 per share, in the year-ago period and falling shy of the consensus analyst estimate of $.22 per share.

Meridian spent $2.9 million on R&D in Q1 compared to $2.5 million in the year-ago period, while SG&A costs totaled $13.5 million in fiscal Q1 compared to $13.2 million in the year-ago period.

Meridian ended the quarter with $43.7 million in cash and cash equivalents.

The company reaffirmed its guidance for the fiscal year ending Sept. 30, 2014, with anticipated net sales in the range of $203 million to $208 million and diluted EPS of between $0.98 and $1.03.