SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM10-K

FOR ANNUAL AND TRANSITION REPORTS

PURSUANT TO SECTIONS 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015.2018.

FOR THE TRANSITION PERIOD FROM                    TO                    

Commission FileNo. 0-14902

MERIDIAN BIOSCIENCE, INC.

3471 River Hills Drive

Cincinnati, Ohio 45244

IRS Employer IDNo. 31-0888197

Incorporated under the Laws of Ohio

Phone: (513)271-3700

Securities Registered Pursuant to Section 12(b) of the Act:

Securities Registered Pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     YES  x☐    NO  ¨☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act.    YES  ¨☐    NO  x☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.    YES  x☒    NO  ¨☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegulationS-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  x☒    NO  ¨☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S–K (Section 229.405 of this Chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10–K or any amendment to this Form 10–K.  YES  x    NO  ¨☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company or emerging growth company. See definitions of “large accelerated filer”filer,” “accelerated filer” andfiler,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule12b-2).    YES  ¨☐    NO  x☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

The aggregate market value of Common Shares held bynon-affiliates as of March 31, 20152018 was $786,958,969$592,033,599 based on a closing sale price of $19.08$14.20 per share on March 31, 2015.2018. As of October 31, 2015, 41,846,0492018, 42,402,912 no par value Common Shares were issued and outstanding.

Documents Incorporated by ReferenceDOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Annual Report to Shareholders for the fiscal year ended September 30, 2015 furnished to the Commission pursuant to Rule14a-3(b) are incorporated by reference in Part II as specified and portions of the Registrant’s Proxy Statementregistrant’s proxy statement to be filed with the Commission for its 20162019 Annual Shareholders’ Meeting are incorporated by reference in Part III as specified.

MERIDIAN BIOSCIENCE, INC.

INDEX TO ANNUAL REPORT

ON FORM10-K

FORWARD-LOOKING STATEMENTS

This Annual Report on Form10-K contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements accompanied by meaningful cautionary statements. Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, which may be identified by words such as “estimates”, “anticipates”, “projects”, “plans”, “seeks”, “may”, “will”, “expects”, “intends”, “believes”, “should” and similar expressions or the negative versions thereof and which also may be identified by their context. All statements that address operating performance or events or developments that Meridian expects or anticipates will occur in the future, including, but not limited to, statements relating to per share diluted earnings and revenue, are forward-looking statements. Such statements, whether expressed or implied, are based upon current expectations of the Company and speak only as of the date made. Specifically, Meridian’s forward-looking statements are, and will be, based on management’s then-current views and assumptions regarding future events and operating performance. Meridian assumes no obligation to publicly update or revise any forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. These statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially, including, without limitation, the following: Meridian’s operating results, financial condition and continued growth depends, in part, on its ability to introduce into the marketplace enhancements of existing products or new products that incorporate technological advances, meet customer requirements and respond to products developed by Meridian’s competition, and its ability to effectively sell such products.products and its ability to successfully expand and effectively manage increased sales and marketing operations. While Meridian has introduced a number of internally developed products, there can be no assurance that it will be successful in the future in introducing such products on a timely basis.basis or in protecting its intellectual property, and unexpected or costly manufacturing costs associated with the ramp up of new products could cause actual results to differ from expectations. Meridian relies on proprietary, patented and licensed technologies, andtechnologies. As such, the Company’s ability to protect its intellectual property rights, as well as the potential for intellectual property litigation, would impact its results. Ongoing

consolidations of reference laboratories and formation of multi-hospital alliances may cause adverse changes to pricing and distribution. Recessionary pressures on the economy and the markets in which our customers operate, as well as adverse trends in buying patterns from customers, can change expected results. Costs and difficulties in complying with laws and regulations, including those administered by the United States Food and Drug Administration, can

result in unanticipated expenses and delays and interruptions to the sale of new and existing products.products, as can the uncertainty of regulatory approvals and the regulatory process. The international scope of Meridian’s operations, including changes in the relative strength or weakness of the U.S. dollar and general economic conditions in foreign countries, can impact results and make them difficult to predict. One of Meridian’s growth strategies is the acquisition of companies and product lines. There can be no assurance that additional acquisitions will be consummated or that, if consummated, will be successful and the acquired businesses will be successfully integrated into Meridian’s operations. There may be risks that acquisitions may disrupt operations and may pose potential difficulties in employee retention, and there may be additional risks with respect to Meridian’s ability to recognize the benefits of acquisitions, including potential synergies and cost savings or the failure of acquisitions to achieve their plans and objectives. Meridian cannot predict the outcome of goodwill impairment testing and the impact of possible goodwill impairments on Meridian’s earnings and financial results. Meridian cannot predict the possible impact of U.S. health care legislation enacted in 2010 – the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act – and any modification or repeal of any of the provisions thereof initiated by Congress or the presidential administration, and any similar initiatives in other countries on its results of operations. Efforts to reduce the U.S. federal deficit, breaches of Meridian’s information technology systems, trade wars, increased tariffs, and natural disasters and other events could have a materially adverse effect on Meridian’s results of operations and revenues. In the past, the Company has identified a material weakness in our internal control over financial reporting, which has been remediated, but the Company can make no assurances that a material weakness will not be identified in the future, which if identified and not properly corrected, could materially adversely affect our operations and result in material misstatements in our financial statements. In addition to the factors described in this paragraph, as well as those factors identified from time to time in our filings with the Securities and Exchange Commission, Part I, Item 1A Risk Factors of this Annual Report on Form10-K contains a list and description of uncertainties, risks and other matters that may affect the Company. Readers should carefully review these forward-looking statements and risk factors and not place undue reliance on our forward-looking statements.

PART I.

This Annual Report on Form10-K includes forward-looking statements about our business and results of operations that are subject to risks and uncertainties. See “Forward-Looking Statements” above. Factors that could cause or contribute to such differencesrisks and uncertainties include those discussed in Item 1A. Risk“Risk Factors.” In addition to the risk factors discussed herein, we are also subject to additional risks and uncertainties not presently known to us or that we currently deem immaterial. If any of these risks and uncertainties develops into actual events, our business, financial condition or results of operations could be adversely affected.

Unless the context requires otherwise, references in this Annual Report onForm 10-K to “Meridian,” “we,” “us,” “our,” or “our company” refer to Meridian Bioscience, Inc. and its subsidiaries.

In the discussion that follows, all dollarsdollar amounts and sharesshare amounts are in thousands (both tables and text), except per share data.

This Annual Report on Form10-K refers to trademarks such as Alethia^™, Curian^™, ImmunoCard^®, ImmunoCard STAT!^®, LeadCare^®, MyTaq^™, PREMIER^®, and SensiFAST^™, which are protected under applicable intellectual property laws and are our property. Solely for convenience, our trademarks and tradenames referred to in this Form10-K may appear without the^® or^™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and tradenames. Our molecular diagnostic test platform, formerly known under the tradenamesillumigene andillumipro, is being rebranded under the tradename Alethia. References to Alethia throughout this Annual Report on Form10-K refer to our molecular diagnostic tests and instrumentation formerly marketed and sold under theillumigene andillumipro brands.

ITEM 1.

BUSINESS

Overview

Meridian is a fully-integrated life science company with principal businesses inin: (i) the development, manufacture, sale and distribution of diagnostic test kits, primarily for certain gastrointestinal viral,and respiratory infectious diseases, and parasitic infectious diseases;elevated blood lead levels; and (ii) the manufacture and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells, and bioresearch reagents used by researchers and other diagnostic manufacturers;manufacturers and (iii) the contract developmentresearchers in immunological and manufacture of proteinsmolecular tests for human, animal, plant and other biologicals under cGMP conditions for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.environmental applications. The Company was incorporated in Ohio in 1976. Our principal corporate offices are located near Cincinnati, Ohio, USA.

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Our website iswww.meridianbioscience.com. We make available our Annual Reports on Form10-K, Quarterly Reports on Form10-Q, Current Reports on Form8-K, Proxy Statements and any amendments thereto, free of charge through this website, as soon as reasonably practicable after such material has been electronically filed with or furnished to the Securities and Exchange Commission (SEC)(“SEC”). These reports may also be read and copied at the SEC’s public reference room at 100 F Street, N.E., Washington, DC 20549, phone number 1-800-732-0330. The SEC maintains an internet site containing these filings and other information regarding Meridian atwww.sec.gov. The information on our website is not and should not be considered part of this Annual Report on Form10-K.

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Reportable Segments

Our reportable segments are Diagnostics and Life Science, both of which are headquartered in Cincinnati, Ohio. The Diagnostics segment consists of manufacturing operations in Cincinnati, Ohio, andDetailed information related to the sale and distribution of diagnostic test kitsreportable segments can be found in the countries comprising North, Central and South America (the “Americas”); Europe, Middle East and Africa (“EMEA”); and other countries outside of the Americas and EMEA (rest of the world, or “ROW”). The Life Science segment consists of manufacturing operations in Memphis, Tennessee; Boca Raton, Florida; London, England; Luckenwalde, Germany; and Sydney, Australia, and the sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells and bioresearch reagents domestically and abroad, including sales and business development offices in Singapore and Beijing, China to further pursue growing revenue opportunities in Asia. The Life Science segment also includes the contract development and manufacture of cGMP clinical grade proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines. Financial information for Meridian’s reportable segments is included in Note 7 to the consolidated financial statements.following locations within this Annual Report on Form10-K:

Diagnostics Segment

Overview of Products and Markets

Our primarylargest source of revenues continues to beis clinical diagnostic products, with our Diagnostics segment providing 75%70% of consolidated net revenues for fiscal 2015. Third-party revenues for this segment were $146,000, $142,000 and $145,000 for fiscal 2015, 2014 and 2013, respectively, reflecting a three-year compound annual growth rate of 4%.2018. As of September 30, 2015,2018, our Diagnostics segment had approximately 360400 employees in seven countries.

Our clinical diagnostic products provide accuracy, simplicity and speed; enable early diagnosis and treatment of common, acute medical conditions; and provide for better patient outcomes at reduced costs. We target diagnostics for disease states thatthat: (i) are acute conditions where rapid diagnosis impacts patient outcomes; (ii) have opportunistic demographic and disease profiles; (iii) are underserved by current diagnostic products; andand/or (iv) have difficult sample handling requirements (stool, blood, urine and other body fluids)(e.g., stool). This approach has allowed us to establish significant market share in our target disease states.states, gastrointestinal and respiratory illnesses, and tests for elevated lead levels in blood.

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Our clinical diagnostic products span a broad menu of testing platforms and technologies, and also include transport media that store and preserve specimen samples from patient collection to laboratory testing. Our testing platforms include:

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Our clinical diagnostic products are comprised of products used principally in the detection of infectious diseases caused by various bacteria, viruses, parasites and pathogens. Our focuspathogens, along with the LeadCare brand of tests for quantitative determination of blood lead levels. These products are grouped into the following product familiesfamilies:

Gastrointestinal Assays

Includes tests for the following, among others:C. difficile, EnterohemorrhagicE. coli,Campylobacter jejuni (Campy),H. pylori,Cryptosporidium, giardia lamblia, andcalprotectin.

Respiratory Illness Assays

Includes tests for the following, among others: Group AStreptococcus (strep throat), Influenza,M. pneumoniae (Mycoplasma),Bordetella pertussis (whooping cough), and respiratory syncytial virus (RSV).

Blood Chemistry Assays

Tests for elevated lead levels in Diagnostics are:blood.

Other Assays

Revenues within these focus product families accounted for 79%the following, among others: Group BStreptococcus, Chlamydia trachomatis,Neisseria gonorrhea, 77%Herpes Simplex Virus Type 1 & Type 2, and 77% of our Diagnostics segment’s third-party revenues during fiscal 2015, 2014 and 2013, respectively. These same product families accounted for 59%, 58% and 59% of consolidated net revenues in fiscal 2015, 2014 and 2013, respectively.Malaria.

Our product portfolio includes over 140 diagnostic tests and transport media, and is marketed to acute care hospitals, reference laboratories, and outpatient clinics and physician office laboratories in over 70 countries around the world.

We continue to invest in new product development for our molecular testing platform,illumigene. This platform now has the following commercialized tests (assays):

We have several additionalillumigene tests in development, including bloodborne pathogens that are the causative agents for malaria. We have a robust pipeline ofillumigene opportunities and continue to add new assays to ourillumigene platform menu.

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We believeOur current research and development pipeline for immunoassay products includes a new instrument that ourillumigene system has been well-accepted in our global markets. We now have approximately 1,465 customer account placements. Of these account placements, approximately 1,300 accounts have completed evaluationsutilizes fluorescent chemistry, which improves workflow and validations and are regularly purchasing product,test result readability. This new platform is being branded under the “Curian” name. During fiscal 2019, we expect to submit a 510(k) to the FDA for one or more rapid immunoassay tests for use with the balanceCurian instrument. We expect to develop additional rapid immunoassay tests for use with the Curian instrument beyond 2019. Our current research and development pipeline for molecular products includes a combination test for the detection of our account placements being in some stageH. pyloriand the resistance of product evaluation and/or validation. Of our account placements, we have over 400 accounts that are regularly purchasing, evaluating and/or validating twoone or more assays.antibiotics. Our congenital cytomegalovirus (CMV) test is currently awaiting FDA 510(k) clearance.

Market Trends

The global market for infectious disease tests continues to expand as new disease states are identified, new therapies become available, and worldwide standards of living and access to health care improve. More importantly, within this market, there is a continuing shift from conventional testing, which requires highly trained personnel and lengthy turnaround times for test results, to more technologically advanced testing, which can be performed by less highly trained personnel and completed in minutes or hours.

The increasinggrowing global pressures to contain total health care costs have accelerated the increased use of diagnostic testing. With rapid and accurate diagnoses of infectious diseases, physicians can pinpoint appropriate therapies quickly, leading to faster recovery, shorter hospital stays and lower overall treatment cost. The creation of Accountable Care Organizations (ACOs)Integrated Delivery Networks (“IDNs”) in our U.S. market in particular, hashave the goal of increasing the efficiency of health care delivery, reducing spending and improving clinical outcomes. We believe our product portfolio positions us competitively with ACOsIDNs and health care systems that are transitioning fromfee-for-service compensation models to compensation models based on the total outcome costs of a given patient.value-based reimbursement. OurC. difficile, Group BStreptococcus, Group AStreptococcus, andH. pylori products are all examples of how a highly accurate diagnostic test on the front end can mitigate or reduce down-stream costs forof antibiotic use, symptom-relieving drugs and hospital stays.

We also continue to see aggregation of buying power in our U.S. market via multi-hospital group purchasing organizations and integrated delivery networks,IDNs, consolidation among reference laboratories, hospital laboratories being operated by large reference laboratories, and acquisition of physician practices by hospitals. We utilize multi-year supply agreements to secure our business where possiblehospitals, health systems and appropriate.for-profit specialty health care companies.

Cost containment pressures have also affected health care systems outside the U.S., particularly in Europe, where the health care systems are generallygovernment-run. The level of government budget deficits can have an adverse effect on the amount of government health care spend.

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Sales, Marketing and Focus Product FamiliesDistribution

Our Diagnostics segment’s sales and distribution network consists of the following for each of the broad geographic regions we serve:

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North AmericaAmericas

In North America,the Americas, our sales and distribution network consists of a direct sales force (U.S. only) complemented by independent distributors. The use of independent distributors in the U.S. allows our products to reach any size health care facility and also provides our customers the option to purchase our products directly from Meridian or through an authorized distributor. Two independent distributors in the U.S. accounted for 10% or more of consolidated net revenues in fiscal 2015, 20142018, 2017 and 2013:2016: Cardinal Healthcare Corporation (“Cardinal”) and Thermo Fisher Scientific.Scientific (“Fisher”). Our Diagnostics segment revenues from Cardinal were approximately $29,000, $28,000$21,000, $22,000 and $35,000$20,000 during fiscal 2015, 20142018, 2017 and 2013,2016, respectively. Our Diagnostics segment revenues from Thermo Fisher were approximately $25,000, $23,000$22,000, $18,000 and $25,000$20,000 during fiscal 2015, 20142018, 2017 and 2013,2016, respectively.

EMEA

In EMEA,Europe, the Middle East and Africa (“EMEA”), our sales and distribution network consists of direct sales forcespersonnel in Belgium, France Holland and Italy, and independent distributors in other European countries, Africa and the Middle East. We have implemented a direct sales presence in Germany and the U.K. for our illumigene products, and utilize independent distributors for our immunoassay products. We maintain a distribution center near Milan, Italy.

ROW

With the exception of Australia in whichand China, where we utilize a direct sales force,personnel, we utilize independent distributors throughout the ROW.

Our Diagnostics segment’s focus product families are described below:

C. difficile

C. difficile, causative agentrest of serious hospital acquired bacterial infections, is our largest product family, generating approximately $31,000 in global revenues for fiscal 2015, a 12% decrease from fiscal 2014 – reflecting a combination of sales of our molecular-based and traditional immunoassay products, with our molecular product now representing approximately 80% of this product category. This product family has experienced significant competition in recent years from new technologies, primarily other molecular testing platforms. See Competition discussion below.

Foodborne

Our foodborne product family achieved approximately $25,000 in global revenues for fiscal 2015, an increase of 8%, with over 95% of such sales occurring in the U.S. Our foodborne products include tests for EnterohemorrhagicE. coli (EHEC) andCampylobacter jejuni (Campy)world (“ROW”). In the U.S. market, we believe that there are potentially 20 million stool cultures that are tested annually for foodborne illnesses. We believe that we have less than a 20% market share for EHEC and less than a 5% market share for Campy.

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We are continuing to re-emphasize the benefits of increased sensitivity and faster turnaround time versus culture methods in our marketing programs. The primary competition for our foodborne products is laboratory culture methods and an immunoassay EHEC shiga toxin test from one of our competitors. We believe that our test offers better workflow, less hands-on time and quicker results, in addition to being fully compliant with CDC-recommended testing methods.

Helicobacter pylori

H. pylori, a bacterium found in the stomach, is a major cause of peptic ulcers and is linked to duodenal ulcers and stomach cancer.H. pylori represents our second largest product family, generating approximately $30,000 in global revenues for 2015, or 6% growth. We offer both antibody and direct antigen tests in alternative formats (single-use and high volume batch). Our major competition in this product family is alternative test methods, serology and urea breath, and the prescription of symptom-relieving medications. Over 75% of ourH. pylori product sales are in the U.S., where our strategy for this product line has been to partner with managed care companies to promote the health and economic benefits of a test and treat strategy, and to move physician behavior away from serology-based testing toward direct antigen testing. In the U.S. market, we believe that there are potentially 30 million people suffering from peptic ulcers and we believe that we currently have an approximate 5% market share.

The patents for ourH. pylori products are owned by us and expire in May 2016 in the U.S. and in 2017 in countries outside the U.S. We expect competition with respect to ourH. pylori products to increase upon the expiration of these patents in 2016 and 2017 as we currently market the only FDA-cleared test to detectH. pylori antigen in stool samples. Such competition may have an adverse impact on our selling prices for these products, or our ability to retain business at prices acceptable to us, and consequently, adversely affect our future results of operations and liquidity, including revenues and gross profit. In order to mitigate any loss in revenues upon patent expiration, among other things, we are researching and experimenting with new products (e.g., detection ofH. pylori on molecular platforms) and attempting to secure significant customers under long-term contracts. We are unable to provide any assurances that we will be successful with any mitigation strategy or that any mitigation strategy will prevent an adverse effect on our future results of operations and liquidity, including revenues and gross profit.

Respiratory

In addition to our immunoassay tests to detect influenza, which have been part of our product portfolio for a number of years, during the last three years we have also introduced three molecular-based products on ourillumigene platform to detect various respiratory conditions. These molecular products, which are less seasonally-dependent than our influenza products, includeillumigene Group A Strep (2012),illumigene Mycoplasma (2013) andillumigene Pertussis (2014). Since their commercialization, these products have been widely accepted in the marketplace and during fiscal 2015 grew to represent over 40% of our total Respiratory product family revenues of $22,000.

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Women’s Health & STD

In December 2011, we introduced ourillumigene Group B Strep product to detect Group BStreptococcus (GBS) in expectant mothers. Early detection of GBS, a major perinatal pathogen for both mothers and their infants that is associated with significant morbidity and mortality, is critical to the prevention and treatment of serious disease in infants. During fiscal 2015, we expanded ourillumigene molecular product platform to include three additional tests directly related to women’s health; these include tests forChlamydia trachomatis(Chlamydia),Neisseria gonorrhea (Gonorrhea) and Herpes Simplex Virus Type 1 & Type 2. With the GBS and HSV tests available worldwide, and the Chlamydia and Gonorrhea tests currently commercialized only outside the U.S., revenues from these women’s health & STD products grew to over $7,000 during 2015, and are currently expected to exceed $10,000 in fiscal 2016.

Competition

Our major competitors in molecular diagnostics are Cepheid (acquired by Danaher) and Becton Dickinson, whowhich have systems with multiple-assay menus. We also face competition in molecular diagnostics, but to a lesser degree, from companies such as Alere, Great Basin, NanosphereAbbott (Alere) and Quidel. These latter companies have a limited commercial menu and tend to compete strictly on price. We believe that our molecular platform offers a number of competitive features:

Our major competitors in rapid immunoassay diagnostics are primarily AlereAbbott (Alere) and Quidel. TheseIn recent years, companies tendsuch as BioMerieux have captured market share in our gastrointestinal category via multi-plex panel tests. However, since their introduction to compete strictly on price.the market, payors have begun to raise concerns over reimbursement levels relative to clinical utility. For blood lead testing, we believe we have the onlyFDA-cleared, CLIA-waivedpoint-of-care test available commercially. Other blood lead testing systems in use, marketed by our competitors, include Graphite Furnace Atomic Absorption Spectroscopy, which requires a highly-skilled technician and larger laboratory space to operate, in addition to not being portable or suitable forpoint-of-care use. We believe that with the breadth and depth of our product portfolio, we are well positioned to capitalize onfor the migration to molecular testing.clinical laboratory.

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Research and Development

Our Diagnostics segment’s research and development organization whichfor infectious disease products is located at our corporate headquarters in Newtown, Ohio, a suburb of Cincinnati, and has expertise in biochemistry, immunology, mycology, bacteriology, virology, parasitology, and molecular biology. Research and development expenses for the Diagnostics segment for fiscal 2015, 2014 and 2013 were approximately $10,000, $10,000 and $8,000, respectively. ThisOur blood-chemistry products have a dedicated research and development organization focuses itsteam in Billerica, Massachusetts. Our research and development activities are focused on new product and new technology development, new applications for our existing technologies, and improvements to existing products. Research and development efforts may occurin-house or with collaborative partners. We believe that new product development is a key source for sustaining revenue growth. The products within ourillumigene Alethia molecular platform,H. pylori product family and H. pylori productblood lead testing family were developed solely in-house.in-house, or substantially so. See “Operating Expenses” section within MD&A on page 39.

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Manufacturing

Our immunoassay and molecular assay products require the production of highly specific and sensitive antigens, antibodies,specialized reagents, primers and enzymes. While weWe produce substantially allthe vast majority of our own requirements including monoclonal and polyclonal antibodies, and a variety of fungal, bacterial and viral antigens, currently a number of the raw materials used inimmunoassay requirements. Primers for our products, including ourillumigeneAlethia molecular assay products are purchased from outside vendors. WithOur blood lead testing products require the recent expansionproduction of our molecular diagnostic manufacturing capacity at our Cincinnati, Ohio location,electrical chemical sensors, which we brought in-house certain molecular component manufacturing that was previously outsourced.manufacture using critical raw materials purchased from outside vendors. We believe that we have sufficient manufacturing and sourcing capacity for anticipated growth over the next several years.

Intellectual Property, Patents and Licenses

We own or license U.S. and foreign patents, most of which are for select products manufactured by our Diagnostics segment. These patents are used in our manufacturing processes for selectedselect products (method(e.g., method patents) or may relate to the design of the test device technology format (design(e.g., design patents). In the absence of patent protection, we may be vulnerable to competitors who successfully replicate our production and manufacturing technologies and processes. Our employees are required to sign confidentiality andnon-disclosure agreements designed to protect our proprietary products. Revenues from these products in fiscal 2015 and fiscal 2014 were as follows:

The patents for ourH. pylori products, are owned by us and expirewhich represented approximately 16%, 15% and 16% of consolidated revenues for fiscal 2018, 2017 and 2016, respectively, expired in May 2016 in the U.S. and in May 2017 in countries outside the U.S. (principally, Australia, Canada, European Community and Japan). We expect competition with respect to ourH. pylori products to increase uponin the expiration of these patents in 2016near future, and 2017 as we currently market the only FDA-cleared test to detectH. pylori antigen in stool samples. Suchsuch competition may have an adverse impact on our selling prices for these products, or our ability to retain business at prices acceptable to us, and consequently, adversely affect our future results of operations and liquidity, including revenues and gross profit. In order to mitigate any loss in revenues upon patent expiration, we are researching and experimenting withOur product development pipeline includes new products (e.g.,product initiatives for the detection ofH. pylori in samples other than stool, and detection ofwe recently entered into a strategic collaboration with DiaSorin to sellH. pylori on molecular platforms).tests. We have executed multi-year supply agreements with our two largest reference laboratory customers forH. pylori tests to secure volume, albeit at lower selling prices. We are unable to provide any assurances that we will be successful with any mitigation strategy or that any mitigation strategy will prevent an adverse effect on our future results of operations and liquidity, including revenues and gross profit.

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The patents for our immunoassay respiratory products are owned by us and expire in 2022 (two products) and 2027 (one product). These patents were issued in the U.S. and European Community, among other jurisdictions.

The remaining five patented products are spread over multiple product families. These patents are either owned by us, or we are free to practice the patents without any restriction or royalty obligation. These patents, where still in effect, collectively expire between 2016 and 2027.

Government Regulation

Our diagnostic products are regulated by the Food & Drug Administration (FDA)FDA as “devices” pursuant to the Federal Food, Drug, and Cosmetic Act (FDCA)(“FDCA”). Under the FDCA, medical devices are classified into one of three classes (i.e., Class I, II or III). Class I and II devices are not expressly approved by the FDA, but, instead, are “cleared” for marketing. Class III devices generally must receive “pre-market“pre-market approval” from the FDA as to safety and effectiveness. Our diagnostics manufacturing facilities in Cincinnati and Billerica are subject to periodic inspection by the FDA. See page 32 within MD&A for discussion regarding the FDA’s inspection of our Billerica facility.

Each of the diagnostic products currently marketed by us in the United States has been cleared by the FDA pursuant to the 510(k) clearance process or is exempt from such requirements. We believe that most, but not all, products under development will be classified as Class I or II medical devices and, in the case of most of our Class I and all Class II devices, will be eligible for 510(k) clearance; however, we can make no assurances in this regard. Meridian’s TRU FLU^® rapid influenza assay was cleared in 2006 as a Class I device. In May 2014, the FDA proposed reclassifying rapid influenza assays as a Class II device, requiring the submission of a new 510(k) application and subjecting TRU FLU and similar competitive devices to increased requirements for sensitivity. If the proposed rule becomes effective, Meridian will have one year to bring its assay up to the new requirements or remove it from the market. Sales of the TRU FLU product totaled approximately $2,000 in fiscal 2015.

Sales of our diagnostic products in foreign countries are subject to foreign government regulation, largelywhich is similar to that of the FDA.

Meridian’s Cincinnati manufacturing facility isOur Diagnostics facilities are certified to ISO 13485:2012.

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Medical Device Tax

On January 1, 2013, the medical device tax established as part of the U.S. health care reform legislation became effective and as a result, the Company made its first required tax deposit near the end of January 2013. During fiscal 2015, 2014 and 2013, the Company recorded to cost of sales approximately $1,900, $1,750 and $1,300, respectively, of medical device tax expense related to this legislation.2016.

Seasonal Factors and Sporadic Outbreaks

Our principal business is the sale of a broad range of clinical diagnostic test kits for common gastrointestinal viral, upperand respiratory infectious diseases, and parasitic infectious diseases.elevated blood lead levels. Certain infectious diseases may be seasonal in nature, while others may be associated with sporadic outbreaks, such as foodborne illnesses or pandemics such as the H1N1an influenza outbreak during fiscal 2009.outbreak. While we believe that the breadth of our diagnostic product lines reduces the risk that infections subject to seasonality and sporadic outbreaks will cause significant variability in diagnostic revenues, we can make no assurance that revenues will not be impacted period over period by such factors.

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Life Science Segment

Overview of Products and Markets

Our Life Science segment’s businesssegment focuses on the development, manufacture, sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells, and bioresearch reagents used by researchers,agri-bio companies and other diagnostic manufacturing companies, as well as contract development and manufacturing services under clinical cGMP conditions. Third-party revenues for this segment were approximately $49,000, $47,000 and $44,000 for fiscal 2015, 2014 and 2013, respectively.companies. As of September 30, 2015,2018, our Life Science segment had approximately 220185 employees in sevenfive countries.

Most of the revenues for our Life Science segment currently come from the manufacture, sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells, and bioresearch reagents used by researchers and other diagnostic manufacturing companies focused on the development of immunoassay and molecular assay tests. Approximately 65%76% of Life Science revenues are generated from the industrial market, defined as diagnostic manufacturers and the agriculture industry.manufacturers. This iscontinues to be an increasing focus offor our Bioline molecular component business,reagent products, which historically focused onhave been marketed to the academic/research marketcustomers that comprisescomprise the remaining 35%24% of Life Science revenues. We utilize direct sales teams in key countries such as the U.S., the U.K., France, Germany, France, Australia and Singapore. Opened in 2013, the Singapore sales and business development office is designed to increase our presence and our revenue opportunities in Asia for both molecular and immunoassay components. Additionally, inAustralia. In order to further pursue revenue opportunities in Asia, and China in particular, during fiscal 20152017 we openedestablished a wholly foreign owned enterprise (“WFOE”) location in Beijing, China, after having operated a representative office there since fiscal 2015. The WFOE employs a business development staff and imports product for sale to customers in Beijing, China. We utilize a network of distributors in other major countries. During fiscal 2015, 16%2018, 18% of third-party revenues for this segment were from two diagnostic manufacturing customers.

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Products such as antibodies, antigens and reagents are marketed primarily to diagnostic manufacturing customers as a source of raw materials for their immunoassay products, or as an outsourced step in their manufacturing processes. For example, we supply a number of major diagnostic manufacturers with proteins used to detect hepatitis A virus and rubella.rubella virus. These products are typically sold in bulk quantities, and may also be custom-designed for a particular manufacturer’s requirements. Sales efforts are focused on multi-year supply arrangements in order to provide stability in volumes and pricing. We believe this benefits both us and our customers.

Molecular biology products such as PCR/qPCR reagents, nucleotides and competent cells are marketed to academic/research and industrial customers. These products are used in measuring DNA and RNA in clinicalhuman, animal, plant and agriculturalenvironmental applications. These reagents improve the purity, yield and speed of PCR reactions. Products such as MyTaq™MyTaq and SensiFAST™SensiFAST are examples of this type of PCR/qPCR reagent.

Our clinical cGMP protein production facility in Memphis, Tennessee serves as an enabling technology for process development and large-scale manufacturing for biologicals used in new drugs and vaccines. The size of the facility is intended to accommodate manufacturing requirements for Phase I and Phase II clinical trials for biopharmaceutical, biotechnology and government agency customers. Our revenues for contract services were approximately $3,000 in each of fiscal 2015, 2014 and 2013.

Market Trends

Globally, sales of molecular components are growing at a faster pace than immunoassay components, and this is consistent with our business in constant-currency. GeographicAs certain global markets become increasingly accessible to us, most notably the Asia-Pacific region, geographic expansion iscontinues to be a significant strategy for our Life Science segment, along with further penetration into industrial markets with our molecular component products.

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Competition

The market for bulk biomedical reagents is highly competitive. Important competitive factors include product quality, price, customer service and reputation. We face competitors, many of which have greater financial, research and development, sales and marketing, and manufacturing resources, and where sole-source supply arrangements do not exist. Customers also may choose to manufacture their biomedical reagentsin-house rather than purchase from outside vendors such as Meridian.

The academic/research market is highly fragmented. Individual purchases are typically of small quantities. The breadth of product offerings, quality, price and service, includingon-line capabilities and technical resources, are important factors to building customer loyalty and repeat purchases.

The market for contract manufacturing in a validated cGMP facility, such as our Memphis facility, is also competitive. Important competitive factors include reputation, customer service and price. Although the product application for this facility was built from our existing expertise in cell culture manufacturing techniques, we face competitors with greater experience in contract manufacturing in a clinical cGMP environment.

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Research and Development

Research and development expenses for our Life Science segment for eachThe focus of fiscal 2015, 2014 and 2013 were approximately $3,000. Thisthis research and development organizationactivity is involved in activities for our cGMP facility and development of new molecular and immunological reagent products. See “Operating Expenses” section within MD&A on page 39.

Manufacturing and Government Regulation

Our Life Science facilities are ISO 9001:2008 certified, and13485:2016 certified. Additionally, where appropriate, our Life Science facilities comply with Regulation EC 1069:2009.

The cGMP clinical grade proteins that are produced in our Memphis facility are intended to be used as “injectibles,” and, as such, they are produced under cGMP Regulations for Biologics and Human Drugs under the auspices of the FDA. Following clinical trials, approval and licensing of these products is the responsibility of the applicant, who owns the rights to each protein. Typically, the customer is the applicant, not Meridian Life Science.

Acquisitions

Acquisitions have played an important role in the growth of our businesses. Our acquisition objectives include, among other things: (i) enhancing product offerings; (ii) improving product distribution capabilities; (iii) providing access to new markets; and/or (iv) providing access to key biologicals or new technologies that lead to new products. Although we cannot provide any assurance that we will consummate any additional acquisitions in the future, nor can we provide any assurance that any acquisitions will accomplish these objectives, we expect that the potential for acquisitions will continue to provide opportunities for revenue and earnings growth in the future.

During November 2015,March 2016, we made a minority investmentacquired all of the outstanding common stock of Magellan. Details of the Magellan acquisition are set forth in Oasis Diagnostics^® Corporation in order to evaluate our interest in saliva diagnostics and collection devices. Oasis is located in Vancouver, Washington.Note 3 of the accompanying Consolidated Financial Statements.

International Markets

International markets are an important source of revenues and future growth opportunities for both of our segments. For both segments combined, revenues from customers located outside of North Americathe Americas approximated $49,000$66,000 or 25%31% of consolidated fiscal 20152018 revenues, $55,000$61,000 or 29%30% of consolidated fiscal 20142017 revenues, and $54,000$53,000 or 29%27% of consolidated fiscal 20132016 revenues. We expect to continue to look to internationalkey European markets and China as a source of new revenues andrevenue growth in the future.

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During fiscal 2015,Fluctuations in foreign currency exchange rates since fiscal 2017 had an approximate $4,700 unfavorable$2,200 favorable impact on fiscal 2018 revenues; $3,200$1,400 within the Diagnostics segment and $1,500$800 within the Life Science segment. This compares toyear-to-year currency exchange rates having an approximate $850 favorable$1,200 unfavorable impact on revenues in fiscal 2014; $600 favorable2017; $400 within the Diagnostics segment and $250$800 within the Life Science segment. Due to natural hedge relationships with expenses, both cost of sales and operating expenses, the overall impact of exchange rate fluctuations on net earningsoperating income was not materialsignificant during fiscal 2015, 20142018, 2017 or 2013.2016.

Environmental

We are a conditionally exempt, small quantity generator of hazardous waste and have a U.S. EPA identification number. We are in compliance with applicable portions of the federal and state hazardous waste regulations and have never been a party to any environmental proceeding.

ITEM 1A.

RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the following factors, which could materially affect our business, financial condition, cash flows or future results. Any one of these factors could cause our actual results to vary materially from recent results or from anticipated future results. The risks described below are not the only risks facing our company. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may materially adversely affect our business, financial condition and/or operating results.

Risks Affecting Growth and Profitability of our Business

We may be unable to develop new products and services or acquire products and services on favorable terms.

The medical diagnostic and life science industries are characterized by ongoing technological developments and changing customer requirements. As such, our results of operations and continued growth depend, in part, on our ability in a timely manner to develop or acquire rights to, and successfully introduce into the marketplace, enhancements of existing products and services, or new products and services that incorporate technological advances, meet customer requirements and/or respond to products developed by our competition. We cannot provide any assurance that we will be successful in developing or acquiring such rights to products and services on a timely basis, or that such products and services will adequately address the changing needs of the marketplace, either of which could adversely affect our results of operations.

In addition, we must regularly allocate considerable resources to research and development of new products, services and technologies. The research and development process generally takes a significant amount of time from design stageresearch to product launch. This process is conducted in various stages. During each stage, there is a risk that we will not achieve our goals on a timely basis, or at all, and we may have to abandon a product in which we have invested substantial resources.

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We may be unable to successfully integrate operations or to achieve expected cost savings from acquisitions we make.

One of our growth strategies is the acquisition of companies and/or products. Although additional acquisitions of companies and products may enhance the opportunity to increase net earnings over time, such acquisitions could result in greater administrative burdens, increased exposure to the uncertainties inherent in marketing new products, and financial risks of additional operating costs.costs, and risk of asset impairments if future revenues and cash flows are deficient. The principal benefits expected to result from any acquisitions we make will not be achieved fully unless we are able to successfully integrate the operations of the acquired entities with our operations and realize the anticipated synergies, cost savings and growth opportunities from integrating these businesses into our existing businesses. We cannot provide any assurance that we will be able to identify and complete additional acquisitions on terms we consider favorable or that, if completed, will be successfully integrated into our operations. Furthermore, we cannot predict the outcome of goodwill impairment testing and the impact of goodwill impairments on the Company’s earnings and financial results.

Revenues for our Diagnostics segment may be impacted by our reliance upon two key distributors in North America, seasonal factors and sporadic outbreaks, and changing diagnostic market conditions.

Key Distributors

Our Diagnostics segment’s revenues from sales through two U.S. distributors were 37%approximately 29% and 36%, respectively,28% of the Diagnostics segment’s total revenues for fiscal 20152018 and fiscal 2014,2017, respectively, or 28% and 27%, respectively,approximately 20% of oureach fiscal year’s consolidated revenues for fiscal 2015 and fiscal 2014.revenues. These parties distribute our products and other laboratory products toend-user customers. The loss of either of these distributors could negatively impact our revenues and results of operations unless suitable alternatives were timely found or lost sales to one distributor were absorbed by another distributor. Finding a suitable alternative on satisfactory terms may pose challenges in our industry’s competitive environment. As an alternative, we could expand our efforts to distribute and market our products directly. This alternative, however, would require substantial investment in additional sales, marketing and logistics resources, including hiring additional sales and customer service personnel, which would significantly increase our future selling, general and administrative expenses, but would not necessarily result in lower net income levels.expenses.

In addition, buying patterns of these two distributors may fluctuate from quarter to quarter, potentially leading to uneven concentration levels on a quarterly basis.

Seasonal Factors and Sporadic Outbreaks

Our principal business is the sale of a broad range of diagnostic test kits for common gastrointestinal viral, upperand respiratory infectious diseases, and parasitic infectious diseases.elevated blood lead levels. Certain infectious diseases may be seasonal in nature, while others may be associated with sporadic outbreaks, such as foodborne illnesses or pandemics such as H1N1 influenza.an influenza outbreak. While we believe that the breadth of our diagnostic product lines reduces the risk that infections subject to seasonality and sporadic outbreaks will cause significant variability in diagnostic revenues, we can make no assurance that revenues will not be negatively impacted period over period by such factors.

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Changing Diagnostic Market Conditions

Changes in the U.S. health care delivery system have resulted in consolidation among reference laboratories, hospital laboratories being operated by large reference laboratories, and the formation of multi-hospital alliances, reducing the number of institutional customers for diagnostic test products. Consolidation in the U.S. health care industry has also led to the creation of group purchasing organizations (GPOs)(“GPOs”) and integrated delivery networks (IDNs)IDNs that aggregate buying power for hospital groups and put pressure on our selling prices. Due to such consolidation, we may not be able to enter into and/or sustain contractual or other marketing or distribution arrangements on a satisfactory commercial basis with institutional customers, GPOs and IDNs, which could adversely affect our results of operations.

We could be adversely affected by health care reform legislation.

Third-party payers for medical products and services, including state, federal and foreign governments, are increasingly concerned about escalating health care costs and can indirectly affect the pricing or the relative attractiveness of our products by regulating the maximum amount of reimbursement they will provide for diagnostic testing services. Following years of increasing pressure, during 2010 the U.S. government enacted comprehensive health care reform. At present, wereform with the enactment of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, which made changes that significantly impact the pharmaceutical and medical device industries. The Protecting Access to Medicare Act of 2014 requires applicable laboratories to report all private payor reimbursement rates and the volumes for each test they perform. The statute requires that Medicare establish reimbursement rates based on the weighted median of private insurance reimbursement rates effective January 1, 2017. The new Medicare rates would be subject to a maximum reduction of 10% a year for the initial three year period and a maximum of 15% a year for the subsequent three year period. There is no limit on the amount of potential rate increases. As a result, some of our customers in the United States may experience lower Medicare reimbursement rates for our products, which may adversely affect our business, financial condition and results of operations. We are unable to predict whatseeing some effect on the legislation might ultimately have on reimbursement rates for our products. If reimbursement amounts for diagnostic testing services are decreaseddecrease further in the future, such decreases may reduce the amount that will be reimbursed to hospitals or physicians for such services and consequently, could place constraints on the levels of overall pricing, which could have a material effect on our revenues and/or results of operations.

In addition, on January 1, 2013,Having been subject to thenow-repealed 2.3% medical device tax originally established as part of the U.S. health care reform legislation became effectivethrough December 31, 2015, the Company is unable to predict any future legislative changes or developments related to this excise tax or any other excise tax.

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Additional state and federal health care reform measures may be adopted in the future, any of which could have a material adverse effect on our ability to successfully commercialize our products and on our industry in general. For example, the United States government has in the past considered, is currently considering and may in the future consider, health care policies and proposals intended to curb rising health care costs, including those that could significantly affect both private and public reimbursement for health care services. Further, state and local governments, as well as a result, the Company made its first required tax deposit near the endnumber of January 2013. During fiscal 2015, 2014 and 2013, the Company recorded approximately $1,900, $1,750 and $1,300, respectively,foreign governments, are also considering or have adopted similar types of Medical Device Tax expense, which is reflected as a component of cost of salespolicies. Future significant changes in the accompanying Consolidated Statementshealth care system in the United States or elsewhere, and current uncertainty about whether and how changes may be implemented, could have a negative impact on the demand for our products. We are unable to predict whether health care policies, including policies stemming from legislation or regulations affecting our business, may be proposed or enacted in the future, what effect such policies would have on our business, or the effect that ongoing uncertainty about these matters will have on the purchasing decisions of Operations.our customers.

Efforts to reduce the U.S. federal deficit could adversely affect our results of operations.

As part of the Budget Control Act passed in August 2011 to extend the federal debt limit and reduce government spending, $1.2 trillion in automatic spending cuts (known as sequestration) were implemented in 2013. The sequestration requires a 2% cut in Medicare payments for all services, including our diagnostic tests, which, due to subsequent legislative amendments to the statute, will remain in effect through 2024 unless Congressional action is otherwise taken. Government research funding has also been reduced as a result of the sequestration. On January 2, 2013, the American Taxpayer Relief Act of 2012 also was signed into law, which, among other things, further reduces Medicare payments to providers such as hospitals, imaging centers and cancer treatment centers, and increases the statute of limitations period for the government to recover overpayments to providers from three to five years.

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Such reductions in government health care spending or research funding could result in reduced demand for our products or additional pricing pressure. Further, there is ongoing uncertainty regarding the federal budget and federal spending levels, including the possible impacts of a failure to increase the “debt ceiling.” Any U.S. government default on its debt could have broad macroeconomic effects that could, among other things, raise our borrowing costs. Any future shutdown of the federal government or failure to enact annual appropriations could also have a material adverse impact on our business.

Revenues for our Life Science segment may be impacted by customer concentrations and buying patterns.

Our Life Science segment’s revenues from sales of purified antigens and reagents to two diagnostic manufacturing customers were 16%18% and 17% of the Life Science segment’s total revenues for each of fiscal 20152018 and fiscal 2014, or 4%2017, respectively; and 5% of our consolidated revenues for each of fiscal 20152018 and fiscal 2014.2017. Our Life Science segment has fourfive other significant customers, who purchase antigens, antibodies and reagents, which together comprised 10%12% and 8%, respectively,10% of the segment’s total revenues for fiscal 20152018 and fiscal 2014.2017, respectively. Any significant alteration of buying patterns from these customers could adversely affect our period over period revenues and results of operations.

Revenues relating to research, development and manufacturing services for our Life Science segment are generated on a contract by contract basis. The nature of this business is such that each contract provides a unique product and/or service and corresponding revenue stream. While this business has historically generated annual revenues of approximately $2,000 to $4,000, there can be no assurance that future contracts will be secured, and if secured, will be profitable.

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Intense competition could adversely affect our profitability.

The markets for our products and services are characterized by substantial competition and rapid change. Hundreds of companies around the world supply diagnostic tests and immunoassay and molecular reagents. These companies range from multinational health care entities, for which diagnostics is one line of business, to smallstart-up companies. Many of our competitors have significantly greater financial, technical, manufacturing and marketing resources than we do. We cannot provide any assurance that our products and services will be able to compete successfully with the products and services of our competitors.

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We mayexpect to face increased competition uponresulting from expiration of our H. pylori patents in 2016 and 2017.patents.

OurThe patents related tofor ourH. pylori products, expireowned by us, expired in May 2016 in the U.S. and in May 2017 in countries outside the U.S. Revenues from ourH. pylori products were approximately $30,000 in fiscal 2015. We expect competition with respect to ourH. pylori products, high margin products which represent approximately 16% of our total revenues, to increase uponin the expiration of these patents in 2016 and 2017near future, as we currently market theare one of only four companies that marketFDA-cleared test tests to detectH. pylori antigen in stool samples.samples in the U.S. market, one of which is DiaSorin Inc., with whom we recently entered a collaboration agreement to sellH. pylori tests. At present, we are also aware of at least one other company that has commenced clinical trials ofH. pyloriproducts in the U.S. Such competition may have an adverse impact on our selling prices for these products, andor our ability to retain business at prices acceptable to us, and consequently, adversely affect our future results of operations and liquidity, including revenues and gross profit. In order to mitigate any loss in revenues upon patent expiration,Therefore, among other things, we have entered into the above-noted collaboration agreement with DiaSorin, and we are researching and experimenting with new products (e.g., detection of H. pylori on molecular platforms) and attemptingworking to secure significant customers under long-term contracts. We are unable to provide any assurances that we will be successful with any mitigation strategy or that any mitigation strategy will prevent an adverse effect on our future results of operations and liquidity, including revenues and gross profit.

We depend on international revenues, and our financial results may be adversely impacted by foreign currency, regulatory or other developments affecting international markets.

We sell products and services into approximately 70 countries. Approximately 25%31% and 29%30% of our net revenues for fiscal 20152018 and 2014,2017, respectively, were attributable to markets outside of North America.the Americas. For fiscal 2015,2018, approximately 35%20% of our internationalconsolidated revenues were from sales madetransacted in Euros and 40% were from sales made incurrencies other than the U.S. dollars, with the remaining 25% primarily being a combination of sales made in British pounds, Australian dollars and Singapore dollars.dollar. We are subject to the risks associated with fluctuations in the exchange rates for the Australian dollar, British pound, EuroChinese yuan and Singapore dollar to the U.S. dollar.Euro. We are also subject to other risks associated with international operations, including longer customer payment cycles, tariff regulations,trade wars, increased tariffs, requirements for export licenses, instability of foreign governments, and governmental requirements with respect to the importation and distribution of medical devices and immunodiagnostic and molecular biology reagents, all of which may vary by country.

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Risks Affecting our Manufacturing Operations

We are subject to comprehensive regulation, and our ability to earn profits may be restricted by these regulations.

Medical device diagnostics is a highly regulated industry. We cannot provide any assurance that we will be able to obtain necessary governmental clearances or approvals, or timely clearances or approvals, to market future products in the United States and other countries. Costs and difficulties in complying with laws and regulations administered by the U.S. Food and Drug Administration, the U.S. Department of Agriculture, the U.S. Department of Commerce, the U.S. Drug Enforcement Agency, the Centers for Disease Control, or other regulators can result in unanticipated expenses and delays, and interruptions to the sale of new and existing products.

Regulatory approval can be a lengthy, expensive and uncertain process, making the timing and costs of approvals difficult to predict. The failureFailure to comply with these regulations can result in delays in obtaining authorization to sell products, seizure or recall of products, suspension or revocation of authority to manufacture or sell products, and other civil or criminal sanctions.

If we or our third-party vendors fail to comply with FDA regulations relating to the manufacturing of our products or any component part, we may be subject to fines, injunctions and penalties, and our ability to commercially distribute and sell our products may be negatively impacted.

Our diagnostics manufacturing facilities, and the manufacturing facilities of any of our third-party diagnostic component manufacturers or critical suppliers, are required to comply with the FDA’s Quality System Regulation (“QSR”) which sets forth minimum standards for the procedures, execution and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage, and shipping of the products we sell. The FDA may evaluate our compliance with the QSR, among other ways, through periodic announced or unannounced inspections which could disrupt our operations and interrupt our manufacturing. If in conducting an inspection of our manufacturing facilities, or the manufacturing facilities of any of our third-party component manufacturers or critical suppliers, an FDA investigator observes conditions or practices believed to violate the QSR, the investigator may document their observations on a Form FDA 483 that is issued at the conclusion of the inspection. A manufacturer that receives an FDA 483 may respond in writing and explain any corrective actions taken in response to the inspectional observations. The FDA will typically review the facility’s written response and mayre-inspect to determine the facility’s compliance with the QSR and other applicable regulatory requirements. Failure to take adequate and timely corrective actions to remedy objectionable conditions listed on an FDA 483 could result in the FDA taking administrative or enforcement actions. Among these may be the FDA’s issuance of a Warning Letter to a manufacturer, which informs it that the FDA considers the observed violations to be of “regulatory significance” that, if not corrected, could result in further enforcement action.

FDA enforcement actions, which include seizure, injunction and criminal prosecution, could result in total or partial suspension of a facility’s production and/or distribution, product recalls, fines, suspension of the FDA’s review of product applications, and/or the FDA’s issuance of adverse publicity. Thus, an adverse inspection could force a shutdown of our manufacturing operations or a recall of our products. Adverse inspections could also delay FDA approval of our products and could have an adverse effect on our production, sales and profitability.

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We and any of our third-party vendors may also encounter other problems during manufacturing including failure to follow specific protocols and procedures, equipment malfunction, and environmental factors, any of which could delay or impede our ability to meet demand. The manufacture of our product also subjects us to risks that could harm our business, including problems relating to our facilities and errors in manufacturing components that could negatively affect the efficacy or safety of our products or cause delays in shipment of our products. Any interruption or delay in the manufacture of the product, or any of its components could impair our ability to meet the demand of our customers and cause them to cancel orders or switch to competitive products, which could, therefore, have a material adverse effect on our business, financial condition and results of operations.

On June 29, 2017, the FDA, in connection with its Safety Notification related to Magellan’s lead testing systems for venous blood samples, issued its Form 483, Inspectional Observations, to Magellan. This was followed by the FDA issuing a Warning Letter related to the matter on October 23, 2017. While we remain committed to strengthening Magellan’s quality system and ensuring that all aspects of the system are in full compliance, we can provide no assurance that our remediation efforts will be successful to a degree acceptable by the FDA.

Additionally, as set forth in Item 3. “Legal Proceedings”, on April 17, 2018, Magellan received a subpoena from the United States Department of Justice (“DOJ”) regarding its LeadCare product line. The subpoena outlines documents to be produced, and we are cooperating with the DOJ in this matter. We maintain rigorous policies and procedures to promote compliance with applicable regulatory agencies and requirements, and are working with the DOJ to promptly respond to the subpoena. However, we cannot predict when the investigation will be resolved, the outcome of the investigation, or its potential impact on Meridian.

See a more detailed discussion of these matters within MD&A on page 32.

Significant interruptions in production at our principal manufacturing facilities and/or third-party manufacturing facilities would adversely affect our business and operating results.

Products and services manufactured at facilities we own or lease comprised a majority of our revenues. Our global supply of these products and services is dependent on the uninterrupted and efficient operation of these facilities. In addition, we currently rely on a small number of third-party manufacturers to produce certain of our diagnostic products and product components. The operations of our facilities or these third-party manufacturing facilities could be adversely affected by power failures, or natural or other disasters such as earthquakes, floods, tornadoes or terrorist threats. Although we carry insurance to protect against certain business interruptions at our facilities, there can be no assurance that such coverage will be adequate or that such coverage will continue to remain available on acceptable terms, if at all. Any significant interruption in the Company’s or a third-party supplier’s manufacturing capabilities could materially and adversely affect our operating results.

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We depend on sole-source suppliers for certain critical raw materials, and components and finished products. A supply interruption could adversely affect our business.

Raw Materials and Components

Our diagnostic products are made from a wide variety of raw materials that are biological or chemical in nature, and that generally are available from multiple sources of supply. We sole-source certain raw materials and components, due to FDA regulations, which makemakes it time consuming and costly to switch raw materials and components in FDA clearedFDA-cleared products. If certain suppliers fail to supply required raw materials or components, we will need to secure other sources which may require us to conduct additional development and testing and obtain regulatory approval. These activities require significant time and resources, and there is no assurance that new sources will be secured or regulatory approvals, if necessary, will be obtained.

We utilize third-party manufacturers for our instrumentation. One third party manufactures our proprietaryillumipro-10™ Incubator Alethia Incubator/Reader (instrument), a component of ourillumigene Alethia molecular system. This instrument issystem, and a separate third party currently assembles our proprietary LeadCare instruments. Upon commercialization in fiscal 2019, an additional third party will manufacture our Curian instrument. These instruments are manufactured exclusively for Meridian according to our specifications. While other manufacturers for this typethese types of instrumentinstruments are available, we source each instrument solely from one manufacturer due to limit the FDA regulations and costs involved in clearing the system for marketing in the United States. If thisthese third-party manufacturer failsmanufacturers fail to supply us with instruments, we will need to secure another manufacturer, and it may take as long as 12 months to transfer instrument manufacturing. As revenues for ourillumigene molecular system accounted for $41,000 or 21% of consolidated revenues for fiscal 2015, $37,000 or 20% for fiscal 2014 and $34,000 or 18% for fiscal 2013, anAn interruption in the manufacturing of this systemthese instruments could have a material adverse effect on our operating results.

Additionally, one third party manufactures onea certain reagent for use with ourillumigene Alethia assays. While alternative suppliers exist, we elect to utilize this third party exclusively in order to maintain consistency in our materials, which is critical in complying with FDA regulatory requirements. An interruption in the manufacturing of these reagents could have a material adverse effect on our operating results.

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Finished Products

We outsource the manufacturing for certain finished diagnostic products to third parties. A disruption in the supply of these finished products could have a material adverse effect on our business until we find another supplier or bring manufacturingin-house.

Four products manufactured exclusively for us by threetwo separate and independent companies accounted for 18%11%, 17%11% and 17%12% of consolidated revenues in fiscal 2015, 20142018, 2017 and 2013,2016, respectively. Meridian owns all rights and title to the FDA 510(k) clearances for these products.

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Activities undertaken by Meridian to reduce the risk of these sole-supplier arrangements include maintaining adequate inventory levels, supplier qualification procedures, supplier audits, site visits, and frequent communication. Additionally, we have identified potential alternate suppliers.

Risks Related to Intellectual Property and Product Liability

We may be unable to protect or obtain proprietary rights that we utilize or intend to utilize.

In developing and manufacturing our products, we employ a variety of proprietary and patented technologies. In addition, we have licensed, and expect to continue to license, various complementary technologies and methods from academic institutions and public and private companies. We cannot provide any assurance that the technologies that we own or license provide protection from competitive threats or from challenges to our intellectual property. In addition, we cannot provide any assurances that we will be successful in obtaining and retaining licenses or proprietary or patented technologies in the future.

See Item 3. “Legal Proceedings” for a discussion of the status of certain litigation related to our intellectual property.

Product infringement claims by other companies could result in costly disputes and could limit our ability to sell our products.

Litigation over intellectual property rights is prevalent in the diagnostic industry. As the market for diagnostics continues to grow and the number of participants in the market increases, we may increasingly be subject to patent infringement claims. It is possible that a third party may claim infringement against us. If found to infringe, we may attempt to obtain a license to such intellectual property; however, we may be unable to do so on favorable terms, or at all. Additionally, if our products are found to infringe on third-party intellectual property, we may be required to pay damages for past infringement and lose the ability to sell certain products, causing our revenues to decrease. We currently carry intellectual property insurance that covers damages and defense costs from our potential infringement on certain other third-party patents at levels that we believe are commercially reasonable, although there is no assurance that it will be adequate to cover claims that may arise. Any substantial underinsured loss resulting from such a claim could have a material adverse effect on our profitability, and the damage to our reputation in the industry could have a material adverse effect on our business.

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If product liability lawsuits are successfully brought against us, we may incur substantial liabilities and may have to limit or cease sales of our products.

The testing, manufacturing and marketing of medical diagnostic products involves an inherent risk of product liability claims. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit or cease sales of our products. We currently carry product liability insurance at a level we believe is commercially reasonable, although there is no assurance that it will be adequate to cover claims that may arise. In certain customer contracts, we indemnify third parties for certain product liability claims related to our products. These indemnification obligations may cause us to pay significant sums of money for claims that are covered by these indemnifications. In addition, a defect in the design or manufacture of our products could have a material adverse effect on our reputation in the industry and subject us to claims of liability for injury and otherwise. Any substantial underinsured loss resulting from such a claim could have a material adverse effect on our profitability, and the damage to our reputation in the industry could have a material adverse effect on our business.

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Other Risks Affecting Our Business

Our business could be negatively affected if we are unable to attract, hire and retain key personnel.

Our future success depends on our continued ability to attract, hire and retain highly qualified personnel, including our executive officers and scientific, technical, sales and marketing employees, and their ability to manage growth successfully. If such key employees were to leave and we were unable to obtain adequate replacements, our operating results could be adversely affected.

Our bank credit agreement imposesagreements impose restrictions with respect to our operations.

Our bank credit agreement containsagreements contain a number of financial covenants that require us to meet certain financial ratios and tests. If we fail to comply with the obligations in the credit agreement,agreements, we would be in default under the credit agreement.agreements. If an event of default is not cured or waived, it could result in acceleration of any indebtedness under our credit agreement,agreements, which could have a material adverse effect on our business. At September 30, 2018, we have $50,250 outstanding on a five-year term loan entered into in connection with the present time,Magellan acquisition and no borrowings are outstanding under our $30,000 bank revolving credit agreement.facility.

We face risks related to global economic conditions.

We currently generate significant operating cash flows, which combined with access to the credit markets, provides us with discretionary funding capacity for research and development and other strategic activities. However, as an enterprise with global operations and markets, our operations and financial performance are in part dependent upon global economic conditions, and we could be negatively impacted by a global, regional or national economic crisis, including sovereign risk in the event of deterioration in the credit worthiness of or a default by local governments. We are particularly susceptible to the economic conditions in countries where government-sponsored health care systems are the primary payers for health care, including those countries within the European Union that are reducing their public expenditures in an effort to achieve cost savings. The uncertainty in global economic conditions poses a risk to the overall economy that could impact demand for our products, as well as our ability to manage normal commercial relationships with our customers, suppliers and creditors, including financial institutions. As such, if global economic conditions deteriorate significantly, our business could be negatively impacted, including such areas as reduced demand for our products from a slow-down in the general economy, supplier or customer disruptions resulting from tighter credit markets, and/or temporary interruptions in our ability to conductday-to-day transactions through our financial intermediaries involving the payment to or collection of funds from our customers, vendors and suppliers. Whileto-date such factors have not had a significant negative impact on our results or operations, we continue to monitor and plan for the potential impact of these global economic factors.

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Approximately $1,600 and $2,700While the impact of our accounts receivable at September 30, 2015 and September 30, 2014, respectively, was due from Italian hospital customers whose funding ultimately comesthe United Kingdom’s planned separation from the Italian government. In addition, the amount of our annual revenuesEuropean Union (commonly referred to as “Brexit”), a final agreement on which is expected in the countryvery near future, remains uncertain, the resulting immediate changes in foreign currency exchange rates have had a limited overall impact due to natural hedging. However, any predicted deterioration in the United Kingdom and European economic outlook may have an adverse effect on revenue growth, but the extent of Greecesuch effect cannot yet be quantified. In the longer term, it is possible that we will be directly impacted in a number of key areas including, without limitation, the hiring and retention of qualified staff, regulatory affairs, manufacturing, logistics, and increased tariffs. We are closely monitoring the corresponding amount of customer receivables outstanding at any pointBrexit developments in time is not significant,order to determine, quantify and therefore,proactively address changes as they become clear. Despite the Brexit developments, we do not expect any meaningfulmacroeconomic conditions to have a significant impact on our liquidity needs, financial condition or results of operations, although no assurances can be made in this regard. We intend to continue to fund our working capital requirements and dividends from current cash flows from operating activities and cash on hand. If needed, we also have an additional source of liquidity through our $30,000 bank revolving credit facility. Our liquidity needs may change if overall economic conditions worsen and/or liquidity and credit within the financial crisis inmarkets tightens for an extended period of time, and such conditions impact the countrycollectability of Greece.our customer accounts receivable or impact credit terms with our vendors, or disrupt the supply of raw materials and services.

Breaches of our information technology systems could have a material adverse effect on our operations.

We rely on information technology systems to process, transmit and store electronic information in ourday-to-day operations. The secure processing, maintenance and transmission of this information is critical to our operations. Like many multinational corporations, our information technology systems may be subjected to computer viruses or other malicious codes, unauthorized access attempts, and cyber- or phishing-attacks. We also store certain information with third parties that could be subject to these types of attacks. Any such breach could compromise our networks, and the information stored therein could be accessed, publicly disclosed, lost or stolen. Such attacks could result in our intellectual property and other confidential information being lost or stolen, disruption of our operations, and other negative consequences, such as increased costs for security measures or remediation costs, and diversion of management attention. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disruption of our operations, damage to our reputation, and/or cause a loss of confidence in our products and services, all of which could adversely affect our business revenues and competitive position. While we will continue to implement additional protective measures to reduce the risk of and detect cyber incidents, cyber-attacks are becoming more sophisticated and frequent, and the techniques used in such attacks change rapidly. There can be no assurances that our protective measures will prevent attacks that could have a significant impact on our business.

Natural disasters, war and other events could adversely affect our future revenues and operating income.

Natural disasters (including pandemics), war, terrorism, labor disruptions and international conflicts, and actions taken by the United States and other governments or by our customers or suppliers in response to such events, could cause significant economic disruption and political and social instability in the United States and in areas outside of the United States in which we operate. These events could result in decreased demand for our products, adversely affect our manufacturing and distribution capabilities, or increase the costs for, or cause interruptions in, the supply of materials from our suppliers.

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Risks Related to Our Common Stock

Material weaknesses in our internal control over financial reporting could be identified, which if not properly corrected, could materially adversely affect our operations and result in material misstatements in our financial statements.

During fiscal 2017, the Company identified a material weakness in internal control over financial reporting, which has been remediated. However, the Company can make no assurances that a material weakness will not be identified in the future or that, if identified, it will be properly corrected. In the event we are unable to remediate a material weakness identified in the future, we may be unable to provide holders of our securities with required financial information in a timely and reliable manner, and we may incorrectly report financial information. Either of these events could have a material adverse effect on our operations, investor, supplier and customer confidence in our reported financial information and/or the trading price of our common stock.

Additional stock issuance authorizations.

Our board of directors has the authority to issue up to 1,000 shares of undesignated preferred stock and to determine the rights, preferences, privileges and restrictions, including voting rights, of such shares without any future vote or action by the shareholders. The issuance of preferred stock under certain circumstances could have the effect of delaying or preventing a change in control of our company. Ohio corporation law contains provisions that may discourage takeover bids for our company that have not been negotiated with the board of directors. Such provisions could limit the price that investors might be willing to pay in the future for shares of our common stock. In addition, sales of substantial amounts of such shares in the public market could adversely affect the market price of our common stock and our ability to raise additional capital at a price favorable to us.

The market price of our common stock may be volatile and fluctuate significantly, which could result in substantial losses for stockholders and subject us to litigation.

The market price of our common stock may be subject to significant fluctuations due to numerous factors, including but not limited to the risks described in this “Risk Factors” section. In addition, the stock market in general, The NASDAQ Global Market and the market for diagnostics companies in particular may experience a loss of investor confidence. A loss of investor confidence may result in extreme price and volume fluctuations in our common stock that are unrelated or disproportionate to the operating performance of our business, our financial condition or results of operations. These broad market and industry factors may materially harm the market price of our common stock and expose us to securities class-action litigation. Class-action litigation, even if unsuccessful, could be costly to defend and divert management’s attention and resources, which could further materially harm our financial condition and results of operations.

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There can be no assurance that we will continue to pay dividends.

The declaration, amount and timing of the Company’s dividends are subject to capital availability and determinations by our board of directors that cash dividends are in the best interest of our stockholders and are in compliance with all respective laws and our agreements applicable to the declaration and payment of cash dividends. Our continuing ability to pay dividends will depend upon, among other factors, our cash balances and potential future capital requirements for strategic transactions, including acquisitions, debt service requirements, results of operations, financial condition and other factors beyond our control that our board of directors may deem relevant. A reduction in or elimination of our dividend payments, or our dividend program could have a negative effect on our stock price.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

Our corporate offices, infectious disease Diagnostics manufacturing facility, and infectious disease Diagnostics research and development facility are located in five buildings totaling approximately 120,000 square feet on 10 acres of land in the Village of Newtown, a suburb of Cincinnati, Ohio. These properties are owned by us. Our blood-chemistry manufacturing and research and development operations are located in an approximately 30,000 square foot leased facility in Billerica, Massachusetts. We also operate a Diagnostics sales and distribution center near Milan, Italy in an approximately 18,000 square foot two-story building. This facility is owned by our wholly-owned Italian subsidiary, Meridian Bioscience Europe s.r.l. We also rent office space in Paris, France andBraine-l’Alleud, Belgium for sales and administrative functions.

Our Life Science operations are conducted in several facilities in Memphis, Tennessee; Boca Raton, Florida; Taunton, Massachusetts; London, England; Luckenwalde, Germany; Sydney, Australia; Singapore; and Beijing, China. Our facility in Memphis, Tennessee consists of two buildings totaling approximately 44,000 square feet and is owned by us. Our leased facility in Boca Raton, Florida contains approximately 7,500 square feet of manufacturing space. Following are details of our other Life Science facilities, all of which are leased: Taunton – approximately 10,000 square feet of sales and warehouse space; London – approximately 20,00021,000 square feet of sales, warehouse, distribution, research and development, manufacturing and administrative office space; Luckenwalde – approximately 10,000 square feet of sales, warehouse and manufacturing space; Sydney – approximately 8,000 square feet of sales, warehouse, research and development and manufacturing space; Singapore – approximately 2,0005,000 square feet of sales and business developmentwarehouse space; Beijing – less than 1,000 square feet of representative office space maintained forsales and business development purposes.

ITEM 3.

LEGAL PROCEEDINGS

We are a party to various litigation matters that we believe are in the normal course of business. TheAside from the matters discussed below, the ultimate resolution of these matters is not expected to have a material adverse effect on our financial position, results of operations or cash flows. Noflows, and no material provision has been made in the accompanying consolidated financial statementsConsolidated Financial Statements for these matters.

On November 15, 2017, Barbara Forman filed a class action complaint in the United States District Court for the Southern District of Ohio naming Meridian, its Chief Executive Officer and Chief Financial Officer (in their capacities as such) as defendants. An amended complaint was filed on April 16, 2018 and the Company believes the essential elements of the amended complaint are the same. The complaint and the amended complaint are hereafter referred to as the “Complaint”. The Complaint seeks compensatory damages and attorneys’ fees. Meridian has filed a motion to dismiss the Complaint, to which the plaintiff responded on August 14, 2018. The motion has been fully briefed and remains pending before the court. We are unable to determine or predict the ultimate outcome or estimate the range of possible losses, if any. Accordingly, no provision for litigation losses has been included within the accompanying Consolidated Statement of Operations for fiscal 2018 or 2017.

On December 6, 2017, Michael Edelson filed a derivative complaint in the United States District Court for the Southern District of Ohio naming Meridian, its Chief Executive Officer, Chief Financial Officer and certain members of Meridian’s Board of Directors and Audit Committee (in their capacities as such) as defendants. The complaint alleges that Meridian made false and misleading representations concerning certain of Magellan’s lead test systems at or around the time of Meridian’s acquisition of Magellan and subsequent thereto, and the complaint alleges that certain members of the Board of Directors and Audit Committee breached their fiduciary duties in their oversight of the Company’s public disclosures and corporate governance matters. The complaint seeks compensatory damages, equitable relief relating to corporate governance matters and attorneys’ fees. The case has been stayed by agreement of the parties pending resolution of the motion to dismiss the class action described above. We are unable to determine or predict the ultimate outcome or estimate the range of possible losses, if any. Accordingly, no provision for litigation losses has been included within the accompanying Consolidated Statement of Operations for fiscal 2018 or 2017.

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Approximately $600 of expense for attorneys’ fees related to the above two class action matters is included within the accompanying Consolidated Statement of Operations for fiscal 2018. The Company maintains an insurance policy covering these matters, which has a $500 deductible.

On April 17, 2018, Magellan received a subpoena from the United States Department of Justice (“DOJ”) regarding its LeadCare product line. The subpoena outlines documents to be produced, and the Company is cooperating with the DOJ in this matter. The Company maintains rigorous policies and procedures to promote compliance with applicable regulatory agencies and requirements, and is working with the DOJ to promptly respond to the subpoena. However, the Company cannot predict when the investigation will be resolved, the outcome of the investigation, or its potential impact on the Company. Approximately $775 of expense for attorneys’ fees related to this matter is included within the accompanying Condensed Consolidated Statement of Operations for fiscal 2018.

On October 9, 2018, the Company and DiaSorin Inc. entered into a strategic collaboration to sell DiaSorin’sHelicobacter pylori stool antigen test to detectH. pylori for use on its automated LIAISON platform under the Meridian brand name worldwide. The new collaboration results in the termination of all pending legal disputes between the two parties and will expand the previous agreement between DiaSorin and Meridian, which focused on the sale, by DiaSorin, ofco-developed products in major countries in continental Europe.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

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PART II.

ITEM 5.

MARKET FOR REGISTRANT’S COMMON

EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Refer to “Forward-Looking Statements” following the Index in front of this Form10-K and Item 1A “Risk Factors” on Pages 17pages 14 through 26 of this Annual Report.

“Common Stock Information”Market Information

Our common stock trades on the inside back coverNASDAQ Global Select Market under the symbol VIVO.

Holders of the Annual Report to Shareholders for 2015our Common Stock

As of September 30, 2018, there were approximately 635 holders of record and “Quarterlyapproximately 13,200 beneficial owners of our common shares.

Dividends

“Quarterly Financial Data (Unaudited)” relating to our dividends in Note 9 to11 of the Consolidated Financial Statements are incorporated herein by reference. Except as may otherwise be prohibited by applicable law, there are no restrictions on cash dividend payments.

During fiscal 2015, our2018 and 2017, the indicated annual cash dividend rate ofwas established at $0.50 per share (down from $0.80 per share approximated 94% of full year diluted earnings per share, exceeding our long-standing policy of establishing a cash dividend payout ratio of between 75% and 85% of eachin fiscal year’s expected net earnings. Despite there being certain individual fiscal years in which our payout ratio has fallen outside of this policy range, since adopting this policy in November 2002, our cumulative cash dividend payout has approximated 85% of cumulative net earnings during this timeframe.2016). The 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 and opportunities, including acquisitions. At its meeting on November 4, 2015,7, 2018, the board of directors announced a continuation of the $0.80$0.50 indicated annual dividend rate per share for fiscal 2016.2019. We paid dividends of $0.50, $0.575 and $0.80 per share in fiscal 2015, $0.79 per2018, 2017 and 2016, respectively. Except as may otherwise be prohibited by applicable law, there are no restrictions on cash dividend payments.

Stock Total Return Performance

The following graph shows the yearly percentage change in Meridian’s cumulative total shareholder return on its common stock as measured by dividing the sum of (A) the cumulative amount of dividends, assuming dividend reinvestment, during the periods presented, and (B) the difference between Meridian’s share in fiscal 2014price at the end and $0.76 perthe beginning of the periods presented; by the share in fiscal 2013.

Asprice at the beginning of September 30, 2015, there were approximately 800 holdersthe periods presented with the NASDAQ Composite Index and a Peer Group Index. The 2017 Peer Group consists of recordbioMerieux S.A.,Bio-Rad Laboratories, Inc., GenMark Diagnostics, Inc., IDEXX Laboratories, Inc., Luminex Corporation, Myriad Genetics, Inc., Neogen Corporation, OraSure Technologies, Inc., Quidel Corporation and approximately 16,500 beneficial ownersTrinity Biotech Plc. The 2018 Peer Group consists of our common shares.

ITEM 6.

SELECTED FINANCIAL DATA

Incorporated by reference from inside front cover of the Annual Report to Shareholders for 2015.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Refer to “Forward-Looking Statements” following the Index in front of this Form10-K and Item 1A “Risk Factors” on Pages 17pages 14 through 26 of this Annual Report.

In the discussion that follows, all dollar amounts are in thousands (both tables and text), except per share data.

Results of Operations:

Fourth Quarter

Net earnings for the fourth quarter of fiscal 2015 increased 3%2018 decreased 5% to $8,467,$5,434, or $0.20$0.13 per diluted share, from net earnings for the fourth quarter of fiscal 20142017 of $8,182,$5,726, or $0.20$0.13 per diluted share. The fiscal 2018 fourth quarter results include $4,576 of costs associated with the transition to our new CEO, other restructuring costs and litigation costs (collectively, “restructuring and litigation costs”), along with certainone-time tax effects of the U.S. tax reform act enacted in December 2017 (combined impact on net earnings of $3,145, or $0.07 per diluted share). The fiscal 2017 fourth quarter results included $762 of restructuring and litigation costs (impact on net earnings of $495, or $0.01 per diluted share). Consolidated revenues for the fourth quarter of fiscal 2015 increased $376, or 1%, to $47,0682018 totaled $53,100, an increase of 7% compared to the fourth quarter of fiscal 2014;2017, also increasing 4%7% on a constant-currency basis.

Included within the fourth quarter 2015 results were revenues from ourillumigene^®molecular platform of products totaling $10,215, representing a 12% increase from the fiscal 2014 fourth quarter. Also contributing to the consolidated revenues increase were increased revenues in three of our diagnostic focus product families (foodborne, respiratory and women’s health & STD) and our Life Science segment’s molecular components business. Serving to partially offset these increases were decreased revenues in ourC. difficile andH. pylori focus product families and our Life Science segment’s immunoassay components business.

Revenues for the Diagnostics segment for the fourth quarter of fiscal 20152018 increased 1%2% compared to the fourth quarter of fiscal 2014 (3%2017 (also 2% on a constant-currency basis), reflecting the following for eachcomprised of our focus product families:a 6% growthdecrease in our foodborne products, 39% in our women’s health & STD products, 42% growth in our respiratory products, 5% decline in ourH. pylorimolecular assay products and 17% declinea 5% increase in ourC. difficileimmunoassay and blood chemistry assay products. As it relates to our respiratory products, the growth was driven by several products in both our molecular and immunoassay categories. Our molecular products (illumigene Group A Strep,illumigene Mycoplasma andillumigene Pertussis) experienced volume growth from new assay placements. Our immunoassay products (influenza and Mycoplasma) experienced growth in distribution channels. With growtha 9% increase in its molecular components businessreagents products and a decline27% increase in its immunoassay components business,immunological reagents products, revenues offor our Life Science segment were flatincreased 19% in the fourth quarter of fiscal 20152018 compared to the fourth quarter of fiscal 2014; increasing 4% on2017. On a constant-currency basis.

In fiscal 2018, revenues for the Diagnostics segment increased 5% compared to fiscal 2017 (4% on a constant-currency basis). This increase is comprised of relatively flat revenues for our molecular assay products and a 6% increase in immunoassay and blood chemistry assay products. With a 12% increase in its molecular reagents business and a 9% increase in its immunological reagents business, revenues of our Life Science segment increased 10% during fiscal 2018 compared to fiscal 2017, increasing 9% on a constant-currency basis.

Update on Lead Testing

We offer multiple lead testing systems that are capable of processing both capillary and venous blood samples. Our LeadCare Plus and LeadCare Ultra systems, which accounted for approximately 10% of lead testing annual revenues in fiscal 2016, are used predominantly with venous blood samples. Typically, the Ultra and Plus systems are used in a reference lab setting. Our LeadCare II system is predominantly used with capillary blood samples and is typically used in a physician office setting. LeadCare II system revenue represented approximately 90% of our lead testing product revenues in fiscal 2016. The LeadCare II system is the onlypoint-of-care system for testing lead exposure, receiving CLIA-waived status. Other methods for testing blood lead levels include Graphite Furnace Atomic Absorption Spectroscopy and Mass Spectrometry, which are typically performed in hospital and reference laboratory settings.

On May 17, 2017, the FDA issued a field safety notice advising customers to discontinue use of our lead testing systems with venous blood samples. This field safety notice was followed by product recall notices on May 25^th and June 5^th. Subsequent to the issuances of these field safety and product recall notices, the FDA completed an inspection of our Quality System for our lead testing manufacturing facility in Billerica, Massachusetts, and issued its Form 483, Inspectional Observations, on June 29, 2017, which was expectedly followed by a Warning Letter issued on October 23, 2017. During our 2017 third fiscal quarter, it was determined that a potential impairment of goodwill recorded in connection with the acquisition of Magellan had occurred (i.e., a “triggering event”). An impairment charge of $6,628, on both apre-tax andafter-tax basis, was recorded during the fiscal 2017 third quarter as set forth in Note 1(h)“Summary of Significant Accounting Policies – Intangible Assets” of the accompanying Consolidated Financial Statements.

The Warning Letter requires periodic reporting on our remediation progress. To date, we have satisfied our post-Warning Letter reporting requirements with the FDA. During fiscal 2018 and 2017, we incurred approximately $1,600 in aggregate remediation costs, primarily related to regulatory consultants and studies required to reinstate our venous blood sample claim, and we expect to incur additional costs during fiscal 2019. In the course of remediation, we may encounter additional matters that warrant notifications to the FDA and/or customers regarding the use of its products. At this time, we do not believe that any such notifications would impact the ability to use the LeadCare systems with capillary blood samples.

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As set forth in Item 3. “Legal Proceedings”, on April 17, 2018, Magellan received a subpoena from the United States Department of Justice (“DOJ”) regarding its LeadCare product line. The subpoena outlines documents to be produced, and we are cooperating with the DOJ in this matter. We maintain rigorous policies and procedures to promote compliance with applicable regulatory agencies and requirements, and are working with the DOJ to promptly respond to the subpoena. However, we cannot predict when the investigation will be resolved, the outcome of the investigation, or its potential impact on Meridian.

USE OFNON-GAAP MEASURES

We have supplemented our reported GAAP financial information with information on net earnings, basic earnings per share and diluted earnings per share excluding the effects of: (i) restructuring and litigation costs (fiscal 2018, 2017 and 2016); (ii) the impairment charge against Diagnostics segment goodwill (fiscal 2017); (iii) acquisition-related costs (fiscal 2016); and (iv) certainone-time tax effects of the tax reform act – each of which is anon-GAAP measure. We have provided in the tables below reconciliations to the net earnings, basic earnings per share and diluted earnings per share amounts reported under U.S. Generally Accepted Accounting Principles. We believe that this information is useful to those who read our financial statements and evaluate our operating results because:

Revenue reported on a constant-currency basis is also anon-GAAP measure and is calculated by applying current period average foreign currency exchange rates to each of the comparable periods. Management analyzes revenue on a constant-currency basis to better measure the comparability of results between periods. Because changes in foreign currency exchange rates have anon-operating impact on revenue, management believes that evaluating revenue changes on a constant-currency basis provides an additional and meaningful assessment of revenue to both management and investors.

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Thesenon-GAAP measures may be different fromnon-GAAP measures used by other companies. In addition, thesenon-GAAP measures are not based on any comprehensive set of accounting rules or principles.Non-GAAP measures have limitations, in that they do not reflect all amounts associated with our results as determined in accordance with U.S. GAAP. Therefore, these measures should only be used to evaluate our results in conjunction with corresponding GAAP measures.

REVENUE OVERVIEW

Below are analyses of the Company’s revenue, by reportable segment, provided for each of the following:

- By Reportable Segment & Geographic Region

- By Product Platform/Type

- By Disease Family (Diagnostics only)

Revenue Overview- By Reportable Segment & Geographic Region

Our reportable segments are Diagnostics and Life Science. The Diagnostics segment consists of manufacturing operations for infectious disease diagnostic products in Cincinnati, Ohio and the sale and distribution ofmanufacturing operations for products detecting elevated lead levels in blood in Billerica, Massachusetts (near Boston). These diagnostic test kitsproducts are sold and distributed in the countries comprising North Central and SouthLatin America (the “Americas”); Europe, Middle East and Africa (“EMEA”); and other countries outside of the Americas and EMEA (rest of the world, or “ROW”). The Life Science segment consists of manufacturing operations in Memphis, Tennessee; Boca Raton, Florida; London, England; and Luckenwalde, Germany; and Sydney, Australia,Germany, and the sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells, and bioresearch reagents domestically and abroad, including a sales and business development officesfacility, with outsourced distribution capabilities, in Singapore and Beijing, China to further pursue growing revenue opportunities in Asia. The Life Science segment also includes the contract development and manufacture of cGMP clinical grade proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.

Revenues for the Diagnostics segment, in the normal course of business, may be affected from quarter to quarter by buying patterns of major distributors, seasonality and strengththe severity of certainseasonal diseases and outbreaks, and foreign currency exchange rates. Revenues for the Life Science segment, in the normal course of business, may be affected from quarter to quarter by the timing and nature of arrangements for contract services work, which may have longer production cycles than bioresearch reagents and bulk antigens and antibodies, as well as buying patterns of major customers, and foreign currency exchange rates. We believe that the overall breadth of our product lines serves to reduce the variability in consolidated revenues due to these factors.

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Revenues for each of our segments and the geographic regions therein are shown below.

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Revenue Overview- By Product Platform/Type

The revenues generated by each of our reportable segments result primarily from the sale of the following segment-specific categories of products:

Diagnostics

Life Science