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Meridian Bioscience Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 8, 2009 12:15AM
Meridian Bioscience Inc. (VIVO) filed Quarterly Report for the period ended 2009-06-30. Meridian is a fully integrated life sciences company that manufactures markets and distributes a broad range of innovative diagnostic test kits purified reagents and related products and offers biopharmaceutical enabling technologies. Utilizing a variety of methods these products provide accuracy simplicity and speed in the early diagnosis and treatment of common medical conditions such as gastrointestinal viral urinary and respiratory infections. Meridian Bioscience Inc. has a market cap of $857.3 million; its shares were traded at around $21.16 with a P/E ratio of 27.2 and P/S ratio of 6.2. The dividend yield of Meridian Bioscience Inc. stocks is 3.3%. Meridian Bioscience Inc. had an annual average earning growth of 23% over the past 5 years.
Highlight of Business Operations:
Despite recent gains in the major stock market indices during our third fiscal quarter, overall stock market valuations remain significantly lower than twelve months ago, which may raise questions around the potential impairment of goodwill and other long-lived assets. Our annual goodwill impairment review takes place as of June 30th each year and is in process for the current fiscal year. There have been no past impairments from these annual reviews and none are expected for the current period. As of July 31, 2009, our stock price was $22.02 per share, compared to our book value per share of $3.67 as of June 30, 2009. Due to this relationship, stock price trading at 6.0x book value, and our operating results, we believe there have been no triggering events for the evaluation of impairment of our goodwill and other long-lived assets.
For the European Diagnostics operating segment, the sales decrease includes currency translation losses in the approximate amount of $900 and $2,100 for the three and nine-month periods ending June 30, 2009, respectively. Organic sales, which exclude the effects of currency translation, declined 2% for the third quarter and 1% for the nine-month period ended June 30, 2009. Sales for fiscal 2009 were adversely affected by competition in C. difficile products and price competition for H. pylori in Italy. These decreases were partially offset by increased revenues for new products released during fiscal 2008.
Operating income increased 14% to $12,531 for the third quarter of fiscal 2009 and 8% to $35,694 for the first nine months of fiscal 2009, as a result of the factors discussed above.
We do not expect current conditions in the financial markets or overall economic conditions to have a significant impact on our liquidity needs or financial condition. For fiscal 2009, we expect our consolidated sales to be in the range of $140,000 to $144,000, and our diluted earnings per share to be in the range of $0.77 to $0.81. We intend to continue to fund our working capital requirements, capital expenditure requirements and dividends from current cash flows from operating activities. We also have additional sources of liquidity through our investment portfolio and $30,000 bank credit facility, if needed. To date, we have not experienced any significant deterioration in the aging of our customer accounts receivable nor in our vendors ability to supply raw materials and services and extend normal credit terms. Our liquidity needs may change if overall economic conditions worsen and/or liquidity and credit within the financial markets remains tight for an extended period of time, and such conditions impact the collectability of our customer accounts receivable, impact credit terms with our vendors or disrupt the supply of raw materials and services.
Our capital expenditures are estimated to be approximately $3,000 for fiscal 2009 and may be funded with operating cash flows, availability under the $30,000 credit facility, or cash equivalents on-hand. Capital expenditures relate to manufacturing and other equipment of a normal and recurring nature, as well as completion of our facility expansion in Saco, Maine and clinical cGMP expansion in Memphis, Tennessee.
Stocks Discussed: VIVO,