Meridian Bioscience's second-quarter net sales down 6% to $31.1M

• reported second quarter net sales of $31.1 million, a decrease of 6% compared to the same period of the prior fiscal year;
• reported record six months net sales of $73.6 million, an increase of 9%, compared to the same period of the prior fiscal year;
• reported second quarter and six months operating income of $9.1 million and $22.9 million, respectively, decreases of 17% and 1%, compared to the same periods of the prior fiscal year;
• reported second quarter and six months net earnings of $6.0 million and $14.9 million, respectively, decreases of 18% and 3%, respectively, compared to the same periods of the prior fiscal year;
• reported second quarter and six month diluted earnings per share of $0.15 and $0.36, respectively, decreases of 17% and 3% compared to the same periods of the prior fiscal year;
• declared the regular quarterly cash dividend of $0.19 per share for the second quarter of fiscal 2010, (indicated annual rate of $0.76 per share), 12% higher than the regular quarterly rate of fiscal 2009; and
• reaffirmed its revised fiscal 2010 guidance of per share diluted earnings between $0.70 and $0.80 on net sales of $145 million to $153 million.

FINANCIAL HIGHLIGHTS (UNAUDITED)
In Thousands, Except per Share Data

SECOND QUARTER OPERATING RESULTS

Net sales for the second quarter of fiscal 2010 were $31,147,000 as compared to $33,280,000 for the same period of the prior fiscal year, a decrease of 6%. Net earnings for the second quarter of fiscal 2010 were $5,980,000 or $0.15 per diluted share, decreases of 18% and 17%, respectively, compared to the second quarter of fiscal 2009. Diluted common shares outstanding for fiscal 2010 and 2009 were 41,177,000 and 41,133,000, respectively.

YEAR-TO-DATE OPERATING RESULTS

Net sales for the six months ended March 31, 2010, were $73,604,000 as compared to $67,573,000 for the same period of the prior fiscal year, an increase of 9%. Net earnings for the six months ended March 31, 2010, were $14,901,000 or $0.36 per diluted share, both decreases of 3%, compared to the six months ended March 31, 2009. Diluted common shares outstanding for the six months of fiscal 2010 and 2009 were 41,178,000 and 41,128,000, respectively.

CASH DIVIDEND MATTERS

The Board of Directors declared the regular quarterly cash dividend of $0.19 per share for the second quarter ended March 31, 2010. The dividend is of record April 29, 2010, and payable May 10, 2010. This annual indicated dividend rate of $0.76 per share represents a 12% increase over the fiscal 2009 rate of $0.68 per share. Meridian has now increased its regular cash dividend rate nineteen times since it established a regular dividend in 1991. Guided by the Company's policy of setting a payout ratio of between 75% and 85% of each fiscal year's expected net earnings, the actual declaration and amount of dividends will be determined by the Board of Directors in its discretion based upon its evaluation of earnings, cash flow requirements and future business developments, including acquisitions.

FISCAL 2010 GUIDANCE REAFFIRMED

For the fiscal year ending September 30, 2010, management expects net sales to be in the range of $145 million to $153 million and per share diluted earnings to be between $0.70 and $0.80. The sales and earnings guidance provided in this press release does not include the impact of any acquisitions the Company might complete during fiscal 2010.

FINANCIAL CONDITION

The Company's financial condition is sound. At March 31, 2010, current assets were $113.3 million compared to current liabilities of $12.7 million, thereby producing working capital of $100.6 and a current ratio of 8.9. Cash and short-term investments were $61.1 million and the Company had 100% borrowing capacity under its $30,000,000 commercial bank credit facility. The Company has no bank-debt obligations outstanding.

INTERIM UNAUDITED OPERATING RESULTS
(In Thousands, Except per Share Data)

The following table sets forth the unaudited comparative results of Meridian on a U.S. GAAP basis for the interim periods of fiscal 2010 and fiscal 2009.

The following table sets forth the unaudited operating segment data for the interim periods in fiscal 2010 and fiscal 2009 (in thousands).

COMPANY COMMENTS

John A. Kraeutler, Chief Executive Officer, said, "The second quarter was challenged by a very weak influenza season that impacted our global sales of rapid respiratory tests. As a result, upper respiratory test revenues declined during the quarter by nearly 60% and 15% in the U.S. and Europe, respectively, compared to the prior year. In addition, competition in C. difficile testing was intense and caused a flattening of our historical growth patterns in this category. During the quarter, C. difficile revenues were flat in the U.S. and down 15% in Europe compared to the prior year. H. pylori sales continued to trend upward and grew nearly 20% on a worldwide basis year-to-date. Our foodborne category is demonstrating strong double-digit growth rates year-to-date and, recent new contract awards are expected to continue that trend. Meridian Life Science reported a strong 22% increase in sales and is up 14% for the six month period. Looking forward, the recent FDA submission for our initial test in the illumigene™ molecular platform and the recent launch of the technology outside of the U.S. are critical steps in recovering our growth and momentum in C. difficile testing. Once illumigene is cleared for marketing by the FDA, Meridian will have the broadest line of rapid tests for this important disease, including a molecular method that is simple and convenient for most clinical labs."

William J. Motto, Executive Chairman of the Board, said, "As signaled in our most recent press release, fiscal 2010 is a challenging year in terms of sales and earnings growth. During the second quarter we filed a 510(k) for marketing clearance in connection with our illumigene C. difficile product. illumigene represents an important new platform for Meridian Bioscience and we plan to introduce a flow of new molecular tests based on this high performance and simple to run technology. This new testing platform, along with other new tests being introduced and greater sales and marketing efforts, are the keys to re-establishing our long-term double digit growth trends. Our production efficiency remains very high; the principal challenge is to accelerate sales growth. Financially, we are in a solid position with a highly liquid, debt-free balance sheet and strong cash flow. Our per share cash dividend rate continues at $0.19 per quarter or $0.76 per annum. As reported in an earlier press release, we have increased our efforts to find attractive acquisitions and the results of this activity look promising."