Yahoo Finance Meridian Bioscience: In-line Earnings, Revenue Beat in Q1 - Analyst Blog
Diagnostic test-kit maker Meridian Bioscience, Inc. (VIVO) reported first-quarter fiscal 2015 (ended Dec 31, 2014) EPS of 19 cents, up 6% on a year-over-year basis and in line with the Zacks Consensus Estimate.
Meridian Bioscience Inc. - Earnings Surprise | FindTheBest
Quarter Details
Net revenues increased 7% year over year to $48 million and beat the Zacks Consensus Estimate of $46 million, primarily on the back of solid contribution from the company’s key operating units.
Revenues from the Diagnostics segment increased 5% on a year-over-year basis to $36.6 million. The upside can be attributed to increase in revenues from illumigene molecular products (16%), H. pylori test family (12%) and rebounding foodborne test (5%).
Revenues from the Life Science segment rose 15%, primarily on the back of improved revenues from the company’s immunoassay component products, which surged 26% on a year-over-year basis. The upside was mainly due to higher global revenues from the Chinese market and strong order cycles.
Revenues generated from newer Bioline products such as MyTaq, SensiFAST and ISOLATE, increased 18%. However, sales of Meridian Bioscience’s Bioline molecular components were somewhat soft, leading to a revenue increase of only 3%.
Gross margin contracted nearly 150 basis points (bps), primarily due to lower margins reported in the company’s Life Science segment.
Operating expenses spiked a modest 1% year over year, primarily due to higher research and development (R&D) expenses and selling and marketing expenses.
R&D expenses, as a percentage of sales, expanded 10 bps on a year-over-year basis. Selling and marketing expenses, as a percentage of sales, contracted 60 bps. In comparison, general and administrative expenses contracted nearly 150 bps.
Operating margin expanded by 40 bps on a year-over-year basis.
Financial Position
As of Dec 31, 2014, Meridian Bioscience had cash and cash equivalents of $49.5 million compared to $43 million at the end of the previous quarter. After the end of the first quarter, the company had 100% borrowing capacity under its $30.0 million commercial bank credit facility.
Guidance
Management re-affirmed its guidance for fiscal 2015. Net revenues are expected in the range of $193 million to $200 million. EPS is expected in the band of 85–91 cents.
Our Take
Meridian Bioscience reported a decent first quarter of fiscal 2015. Although the company generated modest top-line growth, global business continues to be a soft spot, especially in Japan. Dis-synergies associated with Japanese distributors continue to negatively impact the company’s sales.
However, this has been partially offset by an encouraging Chinese market. In order to gain better market penetration in China, the company’s Life Science division recently set up a new office in the country.
We are encouraged by new product launches and a healthy Bioline product pipeline. Despite that, profitability remains an area of concern due to higher operating expenses and increasing competition.
Other players in the same industry include Accelerate Diagnostics (AXDX), IDEXX Laboratories (IDXX) and Vermillion (VRML).
Currently, Meridian Bioscience has a Zacks Rank #4 (Sell).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
MERIDIAN BIOSCI (VIVO): Free Stock Analysis Report
IDEXX LABS INC (IDXX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
