Meridian Bioscience third-quarter net sales decrease 11% to $33.9 million

• reported third quarter net sales of $33.9 million, a decrease of 11% compared to the same period of the prior fiscal year;
• reported record nine months net sales of $107.5 million, an increase of 2%, compared to the same period of the prior fiscal year;
• reported third quarter and nine months operating income of $9.8 million and $32.7 million, respectively, decreases of 22% and 9%, compared to the same periods of the prior fiscal year;
• reported third quarter and nine months net earnings of $6.4 million and $21.3 million, respectively, decreases of 24% and 11%, respectively, compared to the same periods of the prior fiscal year;
• reported third quarter and nine months diluted earnings per share of $0.16 and $0.52, respectively, decreases of 24% and 10% compared to the same periods of the prior fiscal year; and
• declared the regular quarterly cash dividend of $0.19 per share for the third quarter of fiscal 2010, (indicated annual rate of $0.76 per share), 12% higher than the regular quarterly rate of fiscal 2009.

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

THIRD QUARTER OPERATING RESULTS

Net sales for the third quarter of fiscal 2010 were $33,857,000 as compared to $38,240,000 for the same period of the prior fiscal year, a decrease of 11%. Net earnings for the third quarter of fiscal 2010 were $6,424,000 or $0.16 per diluted share, both decreases of 24%, compared to the third quarter of fiscal 2009. (Net earnings include $673,000 in Bioline acquisition costs or $0.01 per diluted share.) Diluted common shares outstanding for fiscal 2010 and 2009 were 41,151,000 and 41,191,000, respectively.

YEAR-TO-DATE OPERATING RESULTS

Net sales for the nine months ended June 30, 2010 were $107,461,000 as compared to $105,813,000 for the same period of the prior fiscal year, an increase of 2%. Net earnings for the nine months ended June 30, 2010 were $21,325,000 or $0.52 per diluted share, decreases of 11% and 10%, respectively, compared to the nine months ended June 30, 2010. Diluted common shares outstanding for the nine months of fiscal 2010 and 2009 were 41,166,000 and 41,121,000, respectively.

CASH DIVIDEND MATTERS

The Board of Directors declared the regular quarterly cash dividend of $0.19 per share for the third quarter ended June 30, 2010. The dividend is of record July 29, 2010, and payable August 9, 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

Based on actual third quarter and expected fourth quarter operating results, and before the negative impact of foreign currency exchange rates, management now expects fiscal 2010 results will be at the low end of the current guidance range which calls for net sales to be between $145 million and $153 million and per share diluted earnings to be between $0.70 and $0.80. This sales and earnings guidance does not include the effect of the Bioline acquisition completed today. Total transaction expenses for Bioline are expected to be between $1.2 and $1.3 million.

FINANCIAL CONDITION

The Company's financial condition is sound. At June 30, 2010, current assets were $110.1 million compared to current liabilities of $11.9 million, thereby producing working capital of $98.2 and a current ratio of 9.3. Cash and short-term investments were $58.2 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.

THIRD QUARTER 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 third quarters 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, "This quarter, Meridian accomplished three key strategic initiatives; an R&D collaboration with DiaSorin Corporation for automating select Meridian immunoassays; clearance from the FDA for illumigene™ C. difficile, our first test in the illumigene platform, and today's announced acquisition of Bioline, a leader in the development, manufacture and distribution of molecular biology reagents. Each of these actions are expected to accelerate the Company's growth via innovation, product line expansion and, global expansion. The illumigene launch and the acquisition of Bioline will have an immediate positive impact.

Meridian's core diagnostics business continued to show comparative weakness in the areas of respiratory disease testing due to the lack of an influenza season and, continuing competitive challenges in C. difficile testing. illumigene C. difficile is expected to help restore growth in this latter category. To the positive, our food borne diagnostics, led by E. coli and Campylobacter tests, grew 38% in the quarter as more labs realized the importance of these rapid assays. Additionally, global H. pylori test sales again reached double-digit growth as managed care and other insurers realized the cost and patient benefits of a definitive diagnosis followed by eradication therapies.

Meridian Life Science recorded another quarter of growth and has achieved nearly a 10% improvement year-to-date. The addition of the Bioline companies is expected to immediately benefit revenues and growth rates into the future.

Fiscal 2010 has been challenging. We believe that the return to double-digit growth is within reach and that our focus on new product innovation, selected acquisitions and broader global capability will sustain those trends."

William J. Motto, Executive Chairman of the Board, said, "With the FDA clearance to market our illumigene C. difficile product received, and the acquisition of Bioline, Meridian now has two new important drivers of future growth. We are enthusiastic about the outlook for fiscal 2011 and the resumption of our growth trends. Our financial condition is sound and our balance sheet continues to support our acquisition activity and our cash dividend policy. We are continuing to examine a number of potential acquisition candidates that could add to our business on an accretive earnings basis."