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 and/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.

Risk Factors Summary

Risks ~~Affecting Growth~~Related to Our Strategy

If the Merger contemplated by the Merger Agreement does not occur, it could have a material adverse effect on our business, results of operations, financial condition and ~~Profitability~~stock price.

Our financial condition, results of operations and cash flows could be adversely affected by outbreaks of disease, such as the COVID-19 pandemic.

Net revenues for our ~~Business~~Diagnostics segment may be impacted by our reliance upon large customers in North America, seasonal factors and sporadic outbreaks, and changing diagnostic market conditions.

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

Intense competition could adversely affect our profitability and operating results.

•

We expect to continue facing increased competition resulting from the expiration of our H. pylori patents.

Risks Related to our Intellectual Property

We may be unable to protect or obtain adequate patent protection for intellectual property that we utilize or intend to utilize.

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

Risks Related to our Operations

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

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

The effective tax rate of the Company may be negatively impacted by changes in the mix of earnings as well as future changes to tax laws in global jurisdictions in which we operate.

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

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

Our ability to meet future customer demand for selected products is dependent upon our ability to successfully manage our manufacturing capacity and supply chains.

Increased prices for, poor quality of, or extended inability to source raw materials or services used in our products, and supply chain disruptions, could adversely affect profitability.

Risks Related to Legal, Regulatory and International Matters

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

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.

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We incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies in the U.S., and failure to comply with these laws could harm our business and the price of our common stock.

We could be adversely affected by health care reform legislation.

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

Global market, political, environmental, and economic conditions, including those related to the financial markets, could have a material adverse effect on our operating results, financial condition, and liquidity.

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

New tariffs and other trade measures could adversely affect our operating results.

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.

Risks Related to Our Common Stock

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.

Our business could be negatively impacted as a result of shareholder activism, an unsolicited takeover proposal or a proxy contest.

The authority of our board to issue preferred stock and the effects of certain provisions of Ohio corporation law may discourage takeover bids.

General Risk Factors

One or more cybersecurity incidents may adversely impact our financial condition, results of operations and/or reputation.

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

Our bank credit agreement imposes restrictions with respect to our operations, which could adversely impact our business.

Risks Related to Our Strategy

If the Merger contemplated by the Merger Agreement does not occur, it could have a material adverse effect on our business, results of operations, financial condition and stock price.

On July 7, 2022, we entered into the Merger Agreement noted above within the “Pending Merger” section of Item 1. “Business.” Completion of the proposed Merger is subject to the satisfaction of various conditions. There is no assurance that all of the various conditions will be satisfied, or that the Merger will be completed within the expected timeframe, or at all. The proposed Merger gives rise to inherent risks that include:

the amount of the cash to be paid under the Merger Agreement is fixed and will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, financial condition or results of operations or in the event of any change in the market price of, analyst estimates of, or projections relating to, our common stock;

legal or regulatory proceedings, or other matters that affect the timing or ability to complete the transaction as contemplated;

the possibility of disruption to our business, including increased costs and diversion of management time and resources;

difficulties maintaining business and operational relationships, including relationships with clients, vendors, suppliers, distributors, resellers and other business partners;

the inability to attract and retain key personnel pending consummation of the proposed Merger;

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potential stockholder litigation relating to the Merger could prevent or delay the Merger or otherwise negatively impact our business and operations;

the inability to pursue alternative business opportunities or make changes to our business pending the completion of the proposed Merger;

developments beyond our control including, but not limited to, changes in domestic or global economic conditions that may affect the timing or success of the proposed Merger; and

the risk that if the proposed Merger is not completed, the market price of our common stock could decline, investor confidence could decline, stockholder litigation could be brought against us, relationships with clients, suppliers and other business partners may be adversely impacted, we may be unable to retain key personnel, and profitability may be adversely impacted due to costs incurred in connection with the proposed Merger and general disruption to our business.

Our financial condition, results of operations and cash flows could be adversely affected by outbreaks of disease, such as the COVID-19 pandemic.

Any outbreak of contagious diseases, such as COVID-19, or other adverse public health developments, could have material and adverse effects on our business operations. Such adverse effects could include diversion or prioritization of health care resources away from the conduct of diagnostic testing, disruptions of or restrictions on the ability of laboratories to process our tests, and delays or difficulties with respect to patients accessing our tests, including those resulting from an inability to travel as a result of quarantines or other restrictions resulting from such outbreaks. As COVID-19 continues to affect individuals and businesses around the globe, we may experience disruptions that could severely impact our business, including:

decreased volume of testing and related sales of certain of our Diagnostics segment products as a result of disruptions to health care providers and limitations on the ability of providers to administer tests;

disruptions or restrictions on the ability of the Company’s, our collaborators’, or our suppliers’ personnel to travel, and temporary closures of our facilities, or the facilities of our collaborators or suppliers;

limitations on employee resources that would otherwise be focused on the development of our products, the processing of our diagnostic tests, and/or the conduct of our clinical trials, because of illness of employees or their families, or requirements imposed on employees to avoid contact with large groups of people; and

delays in necessary interactions with local regulators, ethics committees, and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees.

In addition, the continued spread of COVID-19 globally could adversely affect our manufacturing and supply chains. Parts of our direct and indirect supply chains are located overseas, including in China, and may accordingly be subject to disruption. Additionally, our results of operations could be adversely affected to the extent that COVID-19 or any other epidemic harms our business or the economy in general either domestically or in any other region in which we do business. The extent to which COVID-19 affects our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information that may emerge concerning the severity of COVID-19, and the actions to contain COVID-19 or treat its impact, among others, which could have an adverse effect on our business, results of operations and financial condition. Over the course of the COVID-19 pandemic, we have generally seen a slowing of our assay instrument placements and sales of related test kits, as diagnostic testing sites turned their attention to critical care testing. We are unable to predict when expected sales volume levels for our instruments and related test kits will return. Also, as a result of the COVID-19 pandemic, certain clinical trials related to our products which were underway or scheduled to begin were temporarily placed on hold. Such delays have impacted our timing for filing applications for product clearances with the FDA, as well as related timing of FDA clearances of such filings. Additionally, the COVID-19 pandemic slowed efforts to expand our product portfolio through acquisition opportunities, impacting the speed with which we are able to bring additional products to market.

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Net revenues for our Diagnostics segment may be impacted by our reliance upon large customers in North America, seasonal factors and sporadic outbreaks, and changing diagnostic market conditions.

Key Distributors

Our Diagnostics segment’s net revenues from sales through three customers, including two key distributors, were approximately 29%, 33% and 32% of the Diagnostics segment’s total net revenues for 2022, 2021 and 2020, respectively, or approximately 13%, 13% and 15%, respectively, of each year’s consolidated net revenues. The loss of any one of these customers could negatively impact our net revenues and results of operations unless suitable alternatives were timely found or in the case of distributor customers, 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.

In addition, buying patterns of these customers 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 and respiratory infectious diseases, and 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 an influenza outbreak or the COVID-19 pandemic. While we believe that the breadth of our Diagnostics segment product lines normally reduces the risk that infections subject to seasonality and sporadic outbreaks will cause significant variability in Diagnostics segment net revenues, the COVID-19 pandemic has had a significant adverse impact on our Diagnostics segment net revenues since it began in fiscal 2020. Accordingly, we can make no assurance that net revenues will not be negatively impacted period over period by such factors.

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 GPOs and 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/or IDNs, which could adversely affect our results of operations.

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

Our Life Science segment’s net revenues from three diagnostic manufacturing customers were 31%, 20% and 24% of the Life Science segment’s total net revenues for 2022, 2021 and 2020, respectively. Sales to these three diagnostic manufacturing customers comprised 17%, 12% and 13% of consolidated net revenues for 2022, 2021 and 2020, respectively. In addition, in excess of 10% of the Life Science segment’s total net revenues has historically been concentrated among a number of other significant customers. Any significant alteration of buying patterns from these customers resulting from the decline in COVID-19 related demand, or otherwise, could adversely affect our period over period net revenues and results of operations.

Intense competition could adversely affect our profitability and operating results.

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 small start-up companies. Many of our competitors have significantly greater financial, technical, manufacturing and marketing resources than we do. We cannot provide 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 expect to continue facing increased competition resulting from the expiration of our H. pylori patents.

The patents for our stool antigen H. pylori products, owned by us, expired in May 2016 in the U.S. and in May 2017 in countries outside the U.S. As a result, competition with respect to our stool antigen H. pylori products, products which currently represent approximately 5% of our total net revenues has increased, adversely impacting our selling prices for these products, and/or our ability to retain business at prices acceptable to us. To mitigate certain of the pricing and volume pressures we face within the gastrointestinal product category, we have: (i) operated under a strategic collaboration agreement with DiaSorin to sell H. pylori tests; (ii) adjusted selling prices to secure volume; and (iii) upon FDA clearance in March 2020, launched Curian HpSA, our first assay on the Curian platform, which we expect will help protect our existing customer base using lateral flow tests. We also expect the BreathID and BreathTek products to mitigate competitive pressures, as these systems provide an alternative to stool antigen testing. We are unable to provide assurances that we will be successful with any strategy or that any strategy will prevent an adverse effect on our future results of operations and liquidity, including net revenues and gross profit.

Risks Related to Our Intellectual Property

We may be unable to protect or obtain adequate patent protection for intellectual property 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 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 assurances that we will be successful in obtaining and retaining licenses, or proprietary or patented technologies, in the future.

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 life science and diagnostic industries. 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. Any substantial 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 future results of operations and liquidity, including net revenues and gross profit.

Risks Related to Our Operations

We may be unable to develop new products or acquire products 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 or acquired products, services and technologies, and protecting intellectual property. The research and development process generally takes a significant amount of time from research 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~~project in which we have invested substantial resources, any of which could adversely affect our results of operations.

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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, financial risks of additional operating costs, disrupted operations, challenges in employee retention, and increased risk of asset impairments if future net 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 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 net 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 approximately 26% and 29% of the Diagnostics segment’s total revenues for fiscal 2019 and fiscal 2018, respectively, or approximately 18% and 20%, respectively, of each fiscal year’s consolidated revenues. These parties distribute our products and other laboratory products to

~~end-user~~

~~customers. The loss of either of these distributors could negatively impact our revenues~~ and results of ~~operations unless suitable alternatives were timely found~~operations.

The effective tax rate of the Company may be negatively impacted by changes in the mix of earnings as well as future changes to tax laws in global jurisdictions in which we operate.

We are subject to income taxes in the U.S. and various other global jurisdictions. Our effective tax rate could be adversely affected by changes in the mix of earnings by jurisdiction and the valuation of deferred tax assets and liabilities. Recently, the current U.S. presidential administration committed to tax reform, and if enacted, the impact could be material to our tax provision and value of deferred tax assets and liabilities. We recognize deferred tax assets and liabilities based on the differences between the consolidated financial statement carrying amounts and the tax basis of assets and liabilities. Significant judgment is required in determining our provision for income taxes. We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that some portion or ~~lost sales~~all of a deferred tax asset will not be realized. If we are unable to ~~one distributor were absorbed by another distributor. Finding~~generate sufficient future taxable income, if there is a ~~suitable alternative on satisfactory terms may pose challenges~~material change in the actual effective tax rates, or if there is a change to the time period within which the underlying temporary differences become taxable or deductible, we could be required to increase our valuation allowance against our deferred tax assets, which could result in a material increase in our ~~industry’s competitive environment. As an alternative, we~~effective tax rate.

Changes in tax laws or tax rulings could ~~expand~~have a material impact on our ~~efforts~~effective tax rate. Many countries in the EU, as well as several other countries and organizations such as the Organization for Economic Cooperation and Development, are actively considering changes 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 significantlyexisting tax laws. Certain proposals could include recommendations that could increase our ~~future selling, general~~tax obligations in those countries where we do business. Any changes in the taxation of our activities in such jurisdictions may result in a material increase in our effective tax rate.

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

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~~Table~~operating results.

Products and services manufactured at facilities we own or lease comprise a majority of ~~Contents~~

our net revenues. Our global supply of these products and services is dependent on the uninterrupted and efficient operation of these facilities. In addition, ~~buying patterns of these two distributors may fluctuate from quarter to quarter, potentially leading to uneven concentration levels~~we currently rely on a ~~quarterly basis.~~

~~Seasonal Factors and Sporadic Outbreaks~~

~~Our principal business is the sale~~small number of a broad range of diagnostic test kits for common gastrointestinal and respiratory infectious diseases, and 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 an influenza outbreak. While we believe that the breadththird-party manufacturers to produce certain of our diagnostic products and product ~~lines reduces the risk that infections subject~~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 ~~seasonality and sporadic outbreaks will cause significant variability in diagnostic revenues, we~~protect against certain business interruptions at our facilities, there can ~~make~~be no assurance that ~~revenues~~such coverage will ~~not~~ be ~~negatively impacted period over period by~~adequate or that such ~~factors.~~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, including interruptions resulting from product recall activities like that experienced in our Billerica facility (see “Lead Testing Matters” beginning on page 32 within MD&A) could materially and adversely affect our results of operations.

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~~Changing Diagnostic Market Conditions~~

~~Changes~~

We depend on sole-source suppliers for certain critical raw materials, 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, which makes it time consuming and costly to switch raw materials and components in FDA-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 certain of our instrumentation. One third party manufactures our proprietary Alethia Incubator/Reader (instrument), a component of our Alethia molecular system, and an additional third party manufactures our Curian instrument. These instruments are manufactured exclusively for Meridian according to our specifications. While other manufacturers for these types of instruments are available, we source each instrument solely from one manufacturer to limit the costs involved in clearing the system for marketing in the U.S. ~~health care delivery system have resulted in consolidation among reference laboratories, hospital laboratories being operated by large reference laboratories,~~If these third-party manufacturers fail to supply us with instruments, we will need to secure another manufacturer, and ~~the formation of multi-hospital alliances, reducing the number of institutional customers for diagnostic test products. Consolidation~~it may take as long as 12 months to transfer instrument manufacturing. An interruption in the ~~U.S. health care industry has also led to the creation~~manufacturing of ~~group purchasing organizations (“GPOs”) and IDNs that aggregate buying power for hospital groups and put pressure~~these instruments could have a material adverse effect on our ~~selling prices. Due~~results of operations.

Additionally, one third party manufactures a certain reagent for use with our Alethia assays. While alternative suppliers exist, we elect to ~~such consolidation,~~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 results of operations.

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 manufacturing in-house.

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.

Our ability to meet future customer demand for selected products is dependent upon our ability to successfully manage our manufacturing capacity and supply chains.

To manage our anticipated future growth effectively, it may become necessary for us to enhance our manufacturing and supply chain capabilities, infrastructure and operations, information technology infrastructure, and financial and accounting systems and controls. Organizational growth and scale-up of operations could strain our existing managerial, operational, financial, and other resources. If our management is unable to effectively prepare for our expected future growth, our expenses may increase more than anticipated, our net revenues could grow more slowly than expected, and we may not be able to ~~enter into~~achieve our commercialization, profitability, or product development goals. Our failure to effectively implement the necessary processes and procedures and otherwise prepare for our anticipated growth could have a material adverse effect on our future consolidated financial condition and results of operations.

The Russia / Ukraine war (the “War”) that developed during the second quarter of fiscal year 2022 also could disrupt our supply chains. While to date this War has not caused us to experience any material negative impacts on our business, financial condition, or results of operations, we are unable to estimate the extent to which, if at all, the war could hurt our supply chains. The evolving nature of the War, related international sanctions, other potential government actions, and economic consequences of the War, including incurring higher costs to source materials due to inflation or otherwise, are factors that could disrupt supply chains throughout the world, including potentially the supply chains on which our business relies. If the War either directly or indirectly disrupts our supply chains and we are unable to mitigate such disruption, the War could have a material adverse effect on our future consolidated financial condition and results of operations.

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Increased prices for, poor quality of, or extended inability to source raw materials or services used in our products, and supply chain disruptions, could adversely affect profitability.

Our profitability is affected by the prices of the raw materials used in the manufacture of our products. These prices fluctuate based on a number of factors beyond our control, including changes in supply and demand, general economic conditions, labor costs, fuel-related delivery costs, competition, import duties, tariffs, currency exchange rates, and, in some cases, government regulation. Significant increases in the prices of raw materials, services and transportation costs, similar to the inflationary increases we have experienced since the second half of fiscal 2021, that cannot be recovered through increases in the price of our products and/or ~~sustain contractual or~~offset by savings in other ~~marketing or distribution arrangements on a satisfactory commercial basis with institutional customers, GPOs and/or IDNs, which~~areas, could adversely affect our results of ~~operations.~~

operations and cash flows.

We cannot guarantee that the prices we are paying for raw materials today will continue in the future, or that the marketplace will continue to support current prices for our products, or that such prices can be adjusted to fully or partially offset raw material price increases in the future. Any increases in prices resulting from a tightening supply of these or other commodities could adversely affect our profitability. We do not engage in hedging transactions for raw material purchases, but we do enter into some fixed-price supply contracts.

Our dependency upon regular deliveries of supplies and the quality of those supplies upon delivery from particular suppliers means that interruptions, stoppages, or deterioration of quality in such deliveries could adversely affect our operations until arrangements with alternate suppliers could be made. Several of the raw materials used in the manufacture of our products currently are procured from a single source. In some cases, we also outsource certain services to suppliers, including but not limited to, engineering, assembly, shipping, and commissioning services. If a supplier were unable to deliver these materials or services, or if the quality of these materials or services declined, for an extended period of time as a result of financial difficulties, catastrophic events affecting their facilities, or other factors, including recent supply chain disruptions we have experienced, or if we were unable to negotiate acceptable terms for the supply of materials or services with these suppliers, our business could be adversely ~~affected by health care reform legislation.~~

~~Third-party payers~~affected. We may not be able to find acceptable alternatives, and any such alternatives could result in increased costs. Extended inability to source a necessary raw material or service could cause us to cease manufacturing one or more products 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 attractivenessa period 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 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 seeing some effect on the reimbursement rates for our products. If reimbursement amounts for diagnostic testing services decrease 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,time, which could ~~have a material effect on our revenues and/~~also lead to loss of customers, as well as reputational, competitive, or ~~results of operations.~~

The Patient Protection and Affordable Care Act includes a medical device excise tax for which a moratorium has been in place. However, this moratorium is scheduled to expire December 31, 2019. Our Diagnostics segment’s products are generally subject to this tax. We are unable to predict if Congress will extend the current moratorium or altogether repeal the tax. Without Congressional legislative action, the medical device excise tax will return effective January 1, 2020.

~~Additional state and federal health care reform measures may be adopted in the future, any of~~business harm, 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 number of foreign governments, are also considering or have adopted similar types of policies. Future significant changes in the health 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 our customers.

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~~Table of Contents~~

~~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.

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 two diagnostic manufacturing customers were 24% and 18% of the Life Science segment’s total revenues for fiscal 2019 and fiscal 2018, respectively; and 8% and 5% of our consolidated revenues for fiscal 2019 and fiscal 2018, respectively. Our Life Science segment has five other significant customers, which together comprised 11% of the segment’s total revenues for each of fiscal 2019 and fiscal 2018. Any significant alteration of buying patterns from these customers could adversely affect our period over period revenuesfinancial condition, and results of operations.

~~Intense competition could adversely affect our profitability.~~

~~The markets for our products~~

Risks Related to Legal, Regulatory 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 small

~~start-up~~

companies. Many of our competitors have significantly greater financial, technical, manufacturing and marketing resources than we do. We cannot provide assurance that our products and services will be able to compete successfully with the products and services of our competitors.

~~We expect to face increased competition resulting from expiration of our H. pylori patents.~~

~~The patents for our~~

~~H. pylori~~

~~products, owned by us, expired in May 2016 in the U.S. and in May 2017 in countries outside the U.S. We expect competition with respect to our~~

~~H. pylori~~

~~products, high margin products which represent approximately 16% of our total revenues, to continue to increase, as we currently are one of only four companies that market~~

~~FDA-cleared~~

~~tests to detect~~

~~H. pylori~~

~~antigen in stool samples in the U.S. market, one of which is DiaSorin Inc., with whom we have entered a strategic collaboration agreement to sell~~

~~H. pylori~~

~~tests. At present, we are also aware of at least one other company that has commenced clinical trials of~~

~~H. pylori~~

products in the U.S. 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. We have executed on a number of measures to address competitive pressures in coming off patent. We have executed multi-year supply agreements with our two largest reference laboratory customers for

~~H. pylori~~

tests to secure volume, albeit at lower selling prices. In the first half of fiscal 2020, we expect to launch Curian HpSA, our first assay on the new Curian platform for which the 510(k) was submitted to the FDA in September 2019. We expect that this product will help us protect existing rapid assay accounts using the advantages of the Curian analyzer. However, we are unable to provide assurances that we will be successful with any strategy or that any strategy will prevent an adverse effect on our future results of operations and liquidity, including revenues and gross profit.

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~~Table of Contents~~

~~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. For fiscal 2019, approximately 20% of our consolidated revenues were transacted in currencies other than the U.S. dollar. We are subject to the risks associated with fluctuations in the exchange rates for the Australian dollar, British pound, Canadian dollar, Chinese yuan and Euro. We are also subject to other risks associated with international operations, including longer customer payment cycles, 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.

~~New tariffs and other trade measures could adversely affect our financial results.~~

The current U.S. administration has expressed strong concerns about imports from countries that it perceives as engaging in unfair trade practices, and it is possible the administration could impose import duties or other restrictions on products, components or raw materials sourced from those countries, which may include countries from which we import components or raw materials. We are currently not aware of any new import duties imposed on our products. Any such new import duties or restrictions could have a material adverse effect on our business, results of operations or financial condition. Moreover, these new tariffs, or other changes in U.S. trade policy, could trigger retaliatory actions by affected countries. Certain foreign governments have instituted or are considering imposing trade sanctions on certain U.S. goods.

Other foreign governments are considering the imposition of sanctions that will deny U.S. companies access to critical raw materials. A “trade war” of this nature or other governmental actions related to tariffs or international trade agreements or policies has the potential to adversely impact demand for our products, our costs, customers, manufacturers, suppliers and/or the economic environments in which we operate and, thus may adversely impact our businesses. In addition, there may be changes to existing trade agreements, like the North American Free Trade Agreement (“NAFTA”) and its anticipated successor agreement, the U.S.-Mexico-Canada Agreement (“USMCA”), which is still subject to approval by the United States, Mexico and Canada, greater restrictions on free trade generally, and significant increases in tariffs on goods imported into the United States, particularly tariffs on products manufactured in Mexico, among other possible changes. It remains unclear what the U.S. administration or foreign governments will or will not do with respect to tariffs, NAFTA, USMCA or other international trade agreements and policies. Any changes to NAFTA (or subsequent trade agreements) could impact our operations in countries where we manufacture or sell products or source components, or materials, which could adversely affect our operating results and our business.

~~Risks Affecting our Manufacturing Operations~~

International Matters

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 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~~U.S. and other countries. Costs and difficulties in complying with laws and regulations administered by the ~~U.S. Food and Drug Administration,~~FDA, the U.S. Department of Agriculture, the U.S. Department of Commerce, the U.S. Drug Enforcement Agency, the Centers for Disease Control and Prevention (“CDC”), 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~~cost of approvals difficult to predict. Failure 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.

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~~Table of Contents~~

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, and related regulations, including Medical Device Reporting (“MDR”) regulations regarding reporting of certain malfunctions and adverse events potentially associated with our products. The FDA may evaluate our compliance with the QSR, MDR and other regulations, 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 may

re-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, criminal prosecution, and civil penalties, 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~~net revenues and profitability.

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, consolidated financial condition and results of operations.

On June 29, 2017, the FDA, in connection with its Safety Notification related to Magellan (whom we acquired in March 2016) and its 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. During October 2019, the FDA conducted a

~~follow-up~~

~~inspection of Magellan’s manufacturing facility. In connection with this~~

~~follow-up~~

inspection, the FDA issued five Form 483 observations. In November 2019, we submitted to the FDA our written responses to the five Form 483 observations and have implemented a remediation plan that we are actively working. 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~~

As described in Item 3. “Legal Proceedings”, on April 17, 2018, the Company’s wholly owned subsidiary Magellan received a subpoena from the ~~United States~~U.S. Department of Justice (“DOJ”) regarding its LeadCare product line. The subpoena ~~outlines~~outlined documents to be produced, and ~~we are~~the Company is cooperating with the DOJ in this matter. ~~We maintain~~The Company maintains rigorous policies and procedures to promote compliance with applicable regulatory agencies and requirements and ~~are~~is working with the DOJ to promptly respond to the subpoena, including responding to additional information ~~requests. We~~requests that have followed receipt of the subpoena in April 2018. The Company has executed tolling agreements to extend the statute of limitations. WeIn March and April 2021, DOJ issued two subpoenas, both to former employees of Magellan, calling for witnesses to testify before a federal grand jury related to this matter. In September and October 2021, DOJ issued additional subpoenas to individuals seeking testimony and documents in connection with its ongoing investigation. It is the Company’s understanding that multiple witnesses have testified before the federal grand jury and the DOJ’s investigation is ongoing. Discussions continue with the DOJ to explore resolution of the matter. As of September 30, 2022, in accordance with applicable accounting guidance, the Company believes a loss is probable in the DOJ LeadCare legal matter and has accrued $10,000 as an estimate of the cost to resolve the DOJ LeadCare legal matter, which is reflected in litigation and select legal costs within the Consolidated Statement of Operations for the year ended September 30, 2022. The Company cannot predict when the investigation will be resolved or the outcome of the investigation, orand the ultimate resolution of the DOJ LeadCare legal matter may exceed the amount accrued at September 30, 2022 and could be material to the Company. Expense for attorneys’ fees related to this matter totaling $3,510, $2,803 and $2,035 is included within the Consolidated Statements of Operations for the years ended September 30, 2022, 2021 and 2020, respectively.

- 20 -

Magellan submitted 510(k) applications in December 2018, seeking to reinstate venous blood sample-types for its ~~potential impact on Meridian.~~

~~See a more detailed discussion~~LeadCare II, LeadCare Plus and LeadCare Ultra testing systems. In the second fiscal quarter of 2019, the FDA informed Magellan that each of these ~~matters within MD&A~~510(k) applications had been put on ~~page 25.~~

-Additional Information hold. On July 15, -

~~Table~~2019, we provided responses to the FDA’s requests for Additional Information. These 510(k) applications have since expired and are no longer under FDA review. Further, while Magellan’s LeadCare testing systems remain cleared for marketing by the FDA and permitted for use with capillary blood samples, the FDA advised that it has commissioned a third-party study of ~~Contents~~

~~Significant interruptions~~the Company’s LeadCare testing systems using both venous and capillary blood samples. According to the FDA, the results of the field study will be used in ~~production~~conjunction with other information to determine whether further action by the FDA or the CDC is necessary to protect the public health. The Company intends to fully cooperate with the FDA or CDC on any follow-up based on the third-party study.

During October 2019, the FDA performed a follow-up inspection of Magellan’s manufacturing facility. The FDA issued five Form FDA 483 observations. On March 18, 2020, we participated in a regulatory meeting with the FDA at the FDA’s request to further discuss the Form FDA 483 observations and our ~~principal~~remediation efforts. Since the inspection, we have submitted a number of written responses to the FDA regarding the five Form FDA 483 observations issued in the October 2019 inspection, and have worked diligently to execute a remediation plan. During October 2020, the FDA issued Establishment Inspection Reports which closed out the inspections from June 2017 and October 2019 under 21 C.F.R.20.64(d)(3).

During June 2021, the FDA performed an inspection of Magellan’s manufacturing ~~facilities and/or third-party manufacturing facilities would adversely affect~~facility. As a result of this inspection, the FDA issued one Form 483 observation. On August 3, 2021, FDA sent Magellan a close-out letter for the Warning Letter that FDA issued to Magellan on October 23, 2017. The FDA’s close-out letter notified Magellan that FDA has completed an evaluation of Magellan’s corrective actions in response to FDA’s Warning Letter, and based on FDA’s evaluation, Magellan has addressed the issues identified in the Warning Letter. FDA’s close-out letter also stated that future FDA inspections of Magellan and regulatory activities will further assess the adequacy and sustainability of Magellan’s corrections.

~~Products and services manufactured at facilities we own or lease comprised a majority~~the price of our ~~revenues. Our global supply of these products~~common stock.

As a public company listed in the U.S., we incur significant legal, accounting and ~~services is dependent on the uninterrupted and efficient operation of these facilities.~~other expenses. In addition, changing laws, regulations and standards relating to corporate governance and public disclosure, including regulations implemented by the SEC, the Public Company Accounting Oversight Board (“PCAOB”) and the NASDAQ Global Select Market, may increase our legal and financial compliance costs and/or make some activities more time consuming. These laws, regulations and standards are subject to varying interpretations and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If we ~~currently rely on a small number of third-party manufacturers~~fail to ~~produce certain of~~comply with new laws, regulations and standards, regulatory authorities may initiate legal proceedings against us, and our ~~diagnostic products and product components. The operations of our facilities or these third-party manufacturing facilities~~business may be harmed.

We could be adversely affected by ~~power failures,~~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 ~~natural or other disasters such~~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 with the enactment of the Patient Protection and Affordable Care Act, as ~~earthquakes, floods, tornadoes or terrorist threats. Although we carry~~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 ~~protect against certain business interruptions at~~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 ~~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~~customers in the ~~Company’s or a third-party supplier’s manufacturing capabilities could materially and~~U.S. may experience lower Medicare reimbursement rates for our products, which may adversely affect our ~~operating results.~~business, financial condition and results of operations. We are seeing some effect on the reimbursement rates for our products. If reimbursement amounts for diagnostic testing services decrease 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 net revenues and results of operations.

- 21 -

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 U.S. 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 number of foreign governments, are also considering or have adopted similar types of policies. Future significant changes in the health care system in the U.S. 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 ~~depend~~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 ~~sole-source suppliers for certain critical raw materials, components and finished products. A supply interruption~~our business, or the effect that ongoing uncertainty about these matters will have on the purchasing decisions of our customers.

Efforts to reduce the U.S. federal deficit could adversely affect our ~~business.~~

~~Raw Materials and Components~~

~~Our diagnostic~~results of operations.

Any reductions in government health care spending or research funding in an effort to reduce the U.S. federal deficit could result in reduced demand for our 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, which makes it time consuming and costly to switch raw materials and components in

~~FDA-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~~pricing pressure. Further, there is ~~no assurance~~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 ~~new sources will be secured~~could, among other things, raise our borrowing costs. Any future shutdown of the federal government or ~~regulatory approvals, if necessary, will be obtained.~~

~~We utilize third-party manufacturers for certain~~failure to enact annual appropriations could also have a material adverse impact on our consolidated financial condition, and results of ~~our instrumentation. One third party manufactures our proprietary Alethia Incubator/Reader (instrument), a component of our Alethia molecular system,~~operations.

Global market, political, environmental, and ~~upon its commercialization during~~economic conditions, including those related to the first half of fiscal 2020, an additional third party will manufacture our Curian instrument. These instruments are manufactured exclusively for Meridian according to our specifications. While other manufacturers for these types of instruments are available, we source each instrument solely from one manufacturer to limit the costs involved in clearing the system for marketing in the United States. If these third-party manufacturers 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. An interruption in the manufacturing of these instrumentsfinancial markets, could have a material adverse effect on our operating ~~results.~~results, financial condition, and liquidity.

Our business is sensitive to changes in general economic, political and environmental conditions, both inside and outside the U.S. Conditions such as the following, among others, may create additional risk to our results of operations: (i) continuing uncertainties in the eurozone; (ii) the effects of climate change regulation; (iii) the global effects of the ongoing COVID-19 pandemic, including the Emergency Temporary Standard (“ETS”) COVID-19 workplace vaccination and testing mandate from the Occupational Safety and Health Administration (“OSHA”); (iv) unanticipated implications from the voluntary exit of the U.K. from the EU; and (v) uncertainties in China and emerging markets.

Instability in the global economy and financial markets can adversely affect our business in several ways, including limiting our customers’ ability to obtain sufficient credit or pay for our products within the terms of sale. Competition could further intensify among the manufacturers and distributors with whom we compete for volume and market share, resulting in lower net revenue due to steeper discounts and product mix-down. In particular, if certain key or sole suppliers were to become capacity constrained or insolvent, it could result in a reduction or interruption in supplies or a significant increase in the price of supplies.

The U.K. left the EU on January 31, 2020. While all EU rules and laws continued to apply to the U.K. through the transition period, which ended December 31, 2020, the U.K. and the EU reached a free trade agreement on December 24, 2020, which was ratified on April 28, 2021 and went into effect on May 1, 2021. The agreement includes regulatory and customs cooperation mechanisms, as well as provisions supporting open and fair competition. Under the trade agreement, the U.K. is free to set its own trade policy and can negotiate with other countries that do not currently have free trade deals with the EU. Although the full impact of the trade agreement is uncertain, it is possible that the recent changes to the trading relationship between the U.K. and the EU due to the trade agreement could result in increased cost of goods imported into and exported from the U.K., which may decrease the profitability of our operations. Additional currency volatility could drive a weaker British pound, which could increase the cost of goods imported into the U.K. and may decrease the profitability of our operations. A weaker British pound versus the U.S. dollar may also cause local currency results of our operations to be translated into fewer U.S. dollars during a reporting period. Given the lack of comparable precedent, it is unclear what financial, trade, regulatory and legal implications the trade agreement will have on our business; however, Brexit and its related effects could potentially have an adverse impact on our consolidated financial condition, and results of operations.

- 22 -

~~Additionally, one third party manufactures a certain reagent~~

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

We sell products and services into approximately 70 countries. For fiscal 2022, approximately one-third of our consolidated net revenues were transacted in currencies other than the U.S. dollar. We are subject to the risks associated with fluctuations in the exchange rates for ~~use with~~the Australian dollar, British pound, Canadian dollar, Chinese yuan, Euro, and New Israeli shekel. In addition, we have manufacturing operations, suppliers, and employees located outside the U.S. Since our ~~Alethia assays. While alternative suppliers exist,~~growth strategy depends in part on our ability to further penetrate markets outside the U.S., we ~~elect~~expect to ~~utilize this third party exclusively~~continue to increase our revenue and presence outside the U.S., including in ~~order~~emerging markets.

Our international business is subject to ~~maintain consistency~~risks that are often encountered in ~~our materials, which is critical in complying with FDA regulatory requirements. An~~ non-U.S. operations, including:

interruption in the ~~manufacturing~~transportation of ~~these reagents~~materials to us and finished goods to our customers, including conditions where recovery from natural disasters may be delayed due to country-specific infrastructure and resources;

differences in terms of sale, including payment terms;

local product preferences and product requirements;

changes in a country’s or region’s political or economic condition, including with respect to safety and health issues;

trade protection measures and import or export licensing requirements;

unexpected changes in laws or regulatory requirements, including unfavorable changes with respect to tax, trade or sanctions compliance matters;

limitations on ownership and on repatriation of earnings and cash;

difficulty in staffing and managing widespread operations;

differing labor regulations;

difficulties in enforcing contract and property rights under local law;

difficulties in implementing restructuring actions on a timely or comprehensive basis; and

differing protection of intellectual property.

Such risks may be more likely or pronounced in emerging markets, where our operations may be subject to greater uncertainty due to increased volatility associated with the developing nature of their economic, legal, and governmental systems.

If we are unable to successfully manage the risks associated with expanding our global business or to adequately manage operational fluctuations, it could ~~have a material adverse effect~~adversely affect our business, consolidated financial condition, or results of operations.

New tariffs and other trade measures could adversely affect our operating results.

~~Finished Products~~

~~We outsource the manufacturing for certain finished diagnostic products to third parties. A disruption in the supply of these finished products~~products. Any such new import duties or restrictions could have a material adverse effect on our business, ~~until~~results of operations or financial condition. Moreover, these new tariffs, or other changes in U.S. trade policy, could trigger retaliatory actions by affected countries. Certain foreign governments have instituted or are considering imposing trade sanctions on certain U.S. goods.

~~in-house.~~

~~Four~~operate and, thus may adversely impact our businesses. In addition, there may be changes to existing trade agreements, like the North American Free Trade Agreement (“NAFTA”) and its anticipated successor agreement, the U.S.-Mexico-Canada Agreement (“USMCA”), which is still subject to approval by the U.S., Mexico and Canada, greater restrictions on free trade generally, and significant increases in tariffs on goods imported into the U.S., particularly tariffs on products manufactured ~~exclusively for us by two separate~~in Mexico, among other possible changes. It remains unclear what the U.S. administration or foreign governments will or will not do with respect to tariffs, NAFTA, USMCA or other international trade agreements and ~~independent companies accounted for 11%~~policies. Any changes to NAFTA (or subsequent trade agreements) could impact our operations in countries where we manufacture or sell products, or source components or materials, which could adversely affect our business and results of ~~consolidated revenues in each of fiscal 2019, 2018 and 2017. Meridian owns all rights and title to the FDA 510(k) clearances for these products.~~operations.

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~~Table of Contents~~

~~Our ability to meet future customer demand for selected products is dependent upon our ability to successfully manage our manufacturing capacity.~~

~~scale-up~~

of operations could strain our existing managerial, operational, financial, and other resources. If our management is unable to effectively prepare for our expected future growth, our expenses may increase more than anticipated, our revenue could grow more slowly than expected, and we may not be able to achieve our commercialization, profitability, or product development goals. Our failure to effectively implement the necessary processes and procedures and otherwise prepare for our anticipated growth could have a material adverse effect on our future financial results and condition.

~~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 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 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. Any substantial 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.

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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~~Table of Contents~~

~~Other Risks Affecting Our Business~~

We incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies in the United States, and failure to comply with these laws could harm our business and the price of our common stock.

As a public company listed in the United States, we incur significant legal, accounting and other expenses. In addition, changing laws, regulations and standards relating to corporate governance and public disclosure, including regulations implemented by the SEC, the Public Company Accounting Oversight Board (PCAOB) and the NASDAQ Global Select Market, may increase our legal and financial compliance costs and/or make some activities more time consuming. These laws, regulations and standards are subject to varying interpretations and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If we fail to comply with new laws, regulations and standards, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

~~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 imposes restrictions with respect to our operations.~~

Our bank credit agreement contains 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, we would be in default under the credit agreement. If an event of default is not cured or waived, it could result in acceleration of any indebtedness under our credit agreement, which could have a material adverse effect on our business. At September 30, 2019, we had $75,824 outstanding on a $125,000 bank revolving credit 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 conduct

~~day-to-day~~

~~transactions through our financial intermediaries involving the payment to or collection of funds from our customers, vendors and suppliers. While~~

~~to-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.~~

In June 2016, a majority of voters in the United Kingdom elected to withdraw from the European Union in a national referendum. The U.K. is currently negotiating the terms of its exit from the European Union (“Brexit”). In November 2018, the U.K. and the European Union agreed upon a draft Withdrawal Agreement that sets out the terms of the U.K.’s departure, including commitments on citizen rights after Brexit, a financial settlement from the U.K., and a transition period to allow time for a future trade deal to be agreed. The U.K. Parliament has not approved the Withdrawal Agreement. As such, the date and the terms of the U.K.’s withdrawal from the European Union remain highly uncertain.

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~~Table of Contents~~

Any impact of Brexit depends on the terms of the U.K.’s withdrawal from the European Union, if it ultimately occurs. The ongoing uncertainty on the status of the final Withdrawal Agreement could lead to economic stagnation until an ultimate resolution with respect to Brexit occurs. If the U.K. leaves the European Union with no agreement, it will likely have an adverse impact on labor and trade in addition to creating further short-term uncertainty and currency volatility. In the absence of a future trade deal, the U.K.’s trade with the European Union and the rest of the world would be subject to tariffs and duties set by the World Trade Organization. Additionally, the movement of goods and personnel between the U.K. and the remaining member states of the European Union will be subject to additional inspections and documentation checks, leading to possible delays at ports of entry and departure. Even if an agreement setting forth the terms of the U.K.’s withdrawal from the European Union is approved, the withdrawal could result in significant changes to the trading relationship between the U.K. and the European Union. These changes to the trading relationship between the U.K and the European Union would likely result in increased cost of goods imported into and exported from the U.K., and may decrease the profitability of our operations. Additional currency volatility could drive a weaker British pound, which could increase the cost of goods imported into the U.K. and may decrease the profitability of our operations. A weaker British pound versus the U.S. dollar may also cause local currency results of our operations to be translated into fewer U.S. dollars during a reporting period. With a range of outcomes still possible, the impact from Brexit remains uncertain and will depend, in part, on the final outcome of tariff, trade, regulatory and other negotiations.

~~One or more cybersecurity incidents may adversely impact our financial condition, results of operations and reputation.~~

~~denial-of-service~~

attacks. These risks and threats range from uncoordinated individual attempts to sophisticated and targeted measures. While we are not aware of any material cyber-attacks or breaches of our systems to date, we have and continue to implement measures to safeguard our systems and information and mitigate potential risks, including employee training around phishing, malware and other cyber risks, but there is no assurance that such actions will be sufficient to prevent cyber-attacks or security breaches that manipulate or improperly use our systems, compromise sensitive information, destroy or corrupt data, or otherwise disrupt our operations. The occurrence of such events, including breaches of our security measures or those of our third-party service providers, could negatively impact our reputation and our competitive position and could result in litigation with third parties, regulatory action, loss of business due to disruption of operations and/or reputational damage, potential liability and increased remediation and protection costs, any of which could have a material adverse effect on our financial condition and results of operations. Additionally, as cybersecurity risks become more sophisticated, we may need to increase our investments in security measures which could have a material adverse effect on our financial condition and results of operations.

~~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.

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.

~~- 19 -~~

~~Table of Contents~~

~~The authority of our board to issue preferred stock may discourage takeover bids.~~

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 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, 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 consolidated financial condition and results of operations.

Our business could be negatively impacted as a result of shareholder activism, an unsolicited takeover proposal or a proxy contest.

In recent years, proxy contests and other forms of stockholder activism have been directed against numerous public companies. If a proxy contest or an unsolicited takeover proposal is made with respect to us, we could incur significant costs in defending our company, which would have an adverse effect on our financial results. Shareholder activists may also seek to involve themselves in the governance, strategic direction and operations of our company. Such proposals may disrupt our business and divert the attention of our management and employees, and any perceived uncertainties as to our future direction resulting from such a situation could result in the loss of potential business opportunities, be exploited by our competitors, cause concern to our current or potential customers, and make it more difficult to attract and retain qualified personnel and business partners, all of which could adversely affect our business. In addition, actions of activist stockholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

The authority of our board to issue preferred stock and the effects of certain provisions of Ohio corporation law may discourage takeover bids.

Our board of directors has the authority to issue up to one million 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 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.

- 24 -

~~There can be~~

General Risk Factors

One or more cybersecurity incidents may adversely impact our financial condition, results of operations and reputation.

Our operations involve the use of multiple systems that process, store and transmit sensitive information about our customers, suppliers, employees, financial position, operating results and strategies. We face global cybersecurity risks and threats on a continual and ongoing basis, which include, but are not limited to, attempts to access systems and information, computer viruses, or denial-of-service attacks. These risks and threats range from uncoordinated individual attempts to sophisticated and targeted measures. While we are not aware of any material cyber-attacks or breaches of our systems to date, we have and continue to implement measures to safeguard our systems and information and mitigate potential risks, including employee training around phishing, malware and other cyber risks, but there is no assurance that wesuch actions will ~~resume the payment~~be sufficient to prevent cyber-attacks or security breaches that manipulate or improperly use our systems, compromise sensitive information, destroy or corrupt data, or otherwise disrupt our operations. The occurrence of ~~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~~such events, including breaches of our ~~stockholders and are in compliance with all respective laws, including the applicable provisions~~security measures or those of ~~Ohio law,~~our third-party service providers, could negatively impact our reputation and our ~~agreements applicable~~competitive position and could result in litigation with third parties, regulatory action, loss of business due to the declaration and payment of cash dividends. We suspended the payment of quarterly cash dividends effective during the fiscal 2019 second quarter. Any action to resume the payment of dividends will depend upon, among other factors, our cash balances and potential future capital requirements for strategic transactions, including acquisitions, debt service requirements, resultsdisruption of operations ~~financial condition~~and/or reputational damage, potential liability and ~~other factors beyond our control that our board~~increased remediation and protection costs, any of ~~directors may deem relevant. Ongoing suspension of our dividend payments could have a negative effect on our stock price.~~

Changes in the method of determining London Interbank Offered Rate (“LIBOR”), or the replacement of LIBOR with an alternative reference rate, may adversely affect interest expense related to outstanding debt.

Amounts drawn under our credit facility may bear interest rates in relation to LIBOR, depending on our selection of repayment options. On July 27, 2017, the Financial Conduct Authority (“FCA”) in the U.K. announced that it would phase out LIBOR as a benchmark by the end of 2021. It is unclear whether new methods of calculating LIBOR will be established such that it continues to exist after 2021. The U.S. Federal Reserve is considering replacing U.S. dollar LIBOR with a newly created index called the Broad Treasury Financing Rate, calculated with a broad set of short-term repurchase agreements backed by treasury securities. If LIBOR ceases to exist, we may need to renegotiate the credit facility and may not be able to do so with terms that are favorable to us. The overall financial market may be disrupted as a result of the

~~phase-out~~

~~or replacement of LIBOR. Disruption in the financial market or the inability to renegotiate the credit facility with favorable terms~~which could have a material adverse effect on our consolidated financial condition and results of operations. In an effort to mitigate the financial impact such an attack might have on the Company, we maintain cyber liability insurance coverage. However, such coverage may be insufficient to cover the full impact of a cyber-attack. Additionally, as cybersecurity risks become more sophisticated, we may need to increase our investments in security measures which could have a material adverse effect on our consolidated financial condition and results of operations.

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

Our bank credit agreement imposes restrictions with respect to our operations, which could adversely impact our business.

Our bank credit agreement contains a number of financial ~~position,~~covenants that require us to meet certain financial ratios and ~~operating results.~~

tests. If we fail to comply with the obligations in the credit agreement, we would be in default under the credit agreement. If an event of default is not cured or waived, it could result in acceleration of any indebtedness under our credit agreement, which could have a material adverse effect on our business. At September 30, 2022, we had $25,000 outstanding on a $200,000 bank revolving credit facility.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

~~- 20 -~~

~~Table of Contents~~

ITEM 2.

PROPERTIES

Our corporate offices ~~infectious disease Diagnostics manufacturing facility, and infectious disease Diagnostics research and development facility~~ are located ~~in four buildings totaling approximately 117,000 square feet on approximately seven acres of land~~ in the Village of Newtown, a suburb of Cincinnati, Ohio. ~~These properties are owned by us.~~ Our ~~blood-chemistry~~Newtown campus includes sites for diagnostic test manufacturing and distribution, immunoassay research and development ~~operations~~and administrative functions. Our Newtown campus also includes a new facility where we are ~~located in an approximately 30,000 square foot leased facility~~expanding and automating our Revogene diagnostic test device manufacturing. We also have diagnostic test manufacturing and distribution sites in Billerica, Massachusetts (blood-chemistry), Modi’in, Israel (BreathID and ~~our~~

~~PCR-based~~

~~molecular manufacturing~~BreathTek urea breath testing systems), and Quebec City, Quebec, Canada (Revogene diagnostic test device and instrument manufacturing). Our sites in Billerica, Modi’in and Quebec City also include research and development ~~operations are located in an approximately 24,000 square foot leased facility in Quebec City, Canada.~~functions. We also operate a Diagnostics sales and distribution center near Milan, Italy, ~~in an approximately 18,000 square foot building. This facility is owned by our wholly-owned Italian subsidiary, Meridian Bioscience Europe s.r.l. We also rent office~~and space in ~~Paris, France~~Manasquan, New Jersey to house BreathID technical service and

~~Braine-l’Alleud,~~

~~Belgium for sales and administrative~~ repair functions.

- 25 -

Our Life Science operations are conducted in several facilities in Memphis, Tennessee; Boca Raton, Florida; North Brunswick, New Jersey; London, England; Luckenwalde, Germany; Sydney, Australia; and Beijing, China. ~~Our facility~~Manufacturing of molecular reagents occurs in our London and Luckenwalde sites. Manufacturing of immunoassay reagents occurs in our 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~~sites. Our sites in London and North Brunswick also include our ~~other Life Science facilities, all of which are leased: London – approximately 19,500 square feet of sales, warehouse, distribution,~~primary research and development manufacturing and administrative office space; Luckenwalde – approximately 10,500 square feet of sales, warehouse and manufacturing space; Sydney – approximately 5,000 square feet of sales and warehouse space; Beijing – less than 1,000 square feet of sales and business development space.

functions.

ITEM 3.

LEGAL PROCEEDINGS

We are a party to various litigation matters that we believe are in the normal course of ~~business.~~business, including matters related to the previously discussed pending merger. Aside from the matters discussed below, the ultimate resolution of these matters is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows, and no material provision has been made in the ~~accompanying~~ Consolidated 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 (the Court) naming Meridian, its former Chief Executive Officer and former 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. On July 9, 2019, a settlement was reached with the plaintiff that provides for a $2.1 million payment by the Company. On October 9, 2019, the Court granted a motion for preliminary approval of the settlement, and on November 7, 2019, the settlement amount was paid from the Company’s Directors and Officers insurance policy into a plaintiff escrow account. The Court has scheduled a final approval hearing for March 2020. Because the settlement was a covered claim under our Directors and Officers insurance policy, no provision for litigation losses has been included within the accompanying Consolidated Statements of Operations for fiscal 2019, 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 former Chief Executive Officer, former 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 sought compensatory damages, equitable relief relating

Legal Matter Relating to corporate governance matters and attorneys’ fees. On October 9, 2019, Court granted plaintiff’s motion for voluntary dismissal. Accordingly, no provision for litigation losses has been included within the accompanying Consolidated Statements of Operations for fiscal 2019, 2018 or 2017.

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~~Table of Contents~~

Approximately $30 and $600 of expense for attorneys’ fees related to the above two class action matters is included within the accompanying Consolidated Statements of Operations for fiscal 2019 and 2018, respectively. Amounts expensed in fiscal 2018 included a $500 deductible under our Directors and Officers insurance policy.

LeadCare Product Line

On April 17, 2018, the Company’s wholly owned subsidiary Magellan received a subpoena from the ~~United States~~U.S. Department of Justice (“DOJ”) regarding its LeadCare product line. The subpoena ~~outlines~~outlined 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, including responding to additional information ~~requests.~~requests that have followed receipt of the subpoena in April 2018. The Company has executed tolling agreements to extend the statute of limitations. In March and April 2021, DOJ issued two subpoenas, both to former employees of Magellan, calling for witnesses to testify before a federal grand jury related to this matter. In September and October 2021, DOJ issued additional subpoenas to individuals seeking testimony and documents in connection with its ongoing investigation. It is the Company’s understanding that multiple witnesses have testified before the federal grand jury and the DOJ’s investigation is ongoing. Discussions continue with the DOJ to explore resolution of the matter. As of September 30, 2022, in accordance with applicable accounting guidance, the Company believes a loss is probable in the DOJ LeadCare legal matter and has accrued $10,000 as an estimate of the cost to resolve the DOJ LeadCare legal matter, which is reflected in litigation and select legal costs within the Consolidated Statement of Operations for the year ended September 30, 2022. The Company cannot predict when the investigation will be resolved or the outcome of the investigation, ~~or its potential impact on~~and the ultimate resolution of the DOJ LeadCare legal matter may exceed the amount accrued at September 30, 2022 and could be material to the Company. ~~Approximately $1,585 and $775 of expense~~Expense for attorneys’ fees related to this matter totaling $3,510, $2,803 and $2,035 is included within the ~~accompanying~~ Consolidated Statements of Operations for ~~fiscal 2019~~the years ended September 30, 2022, 2021 and ~~2018,~~2020, respectively.

See “Lead Testing Matters” beginning on page 32 within MD&A.

Litigation Relating to the Merger

On ~~October~~September 9, ~~2018,~~2022, a purported shareholder of the Company filed an action against the Company and ~~DiaSorin Inc. entered into a strategic collaboration to sell DiaSorin’s~~

~~Helicobacter pylori~~

~~stool antigen test to detect~~

~~H. pylori~~

~~for use on its automated LIAISON platform under~~ the ~~Meridian brand name worldwide. The new collaboration resulted~~members of the Company’s board of directors in the ~~termination~~United States District Court for the Southern District of ~~all pending legal disputes between~~New York, captioned Warren v. Meridian Bioscience Inc., No. 1:22-cv-07727 (S.D.N.Y.). This was followed by four other substantively similar actions also brought by purported shareholders against the ~~two parties~~Company and ~~will expand~~ the ~~previous agreement between DiaSorin~~members of the Company’s board of directors. These were Stein v. Meridian Bioscience Inc., No. 1:22-cv-07814 (S.D.N.Y.), filed on September 13, 2022; Coffman v. Meridian Bioscience Inc., No. 1:22-cv-07984 (S.D.N.Y.), filed on September 19, 2022; Morgan v. Meridian Bioscience Inc., No. 1:22-cv-08057 (S.D.N.Y.), filed on September 21, 2022; and Scott v. Meridian ~~which focused~~Bioscience Inc., No. 1:22-cv-08114 (S.D.N.Y.), filed on September 22, 2022. Plaintiffs in each case generally alleged that the ~~sale,~~proxy statements filed by ~~DiaSorin,~~Meridian with the U.S. Securities and Exchange Commission on August 25, 2022 and September 8, 2022 in connection with the Merger misrepresented and/or omitted certain material information and asserted violations of

~~co-developed~~

~~products~~ Sections 14(a) and 20(a) of the Securities Exchange Act of 1934. Among other relief, the plaintiffs in ~~major countries~~each case sought injunctive relief, including directing Meridian to disclose the allegedly omitted material information, enjoining the completion of the Merger, rescinding the Merger in ~~continental Europe. Approximately $50, $2,965~~the event it is consummated, and ~~$630 of expense for attorneys’ fees~~awarding rescissory damages. While Meridian believed that the actions were without merit, on September 30, 2022, Meridian voluntarily filed a Form 8-K that made certain supplemental disclosures related to ~~this matter is included within~~ the ~~accompanying Consolidated Statements of Operations for fiscal 2019, 2018 and 2017, respectively.~~Merger. Thereafter, plaintiffs in all five actions voluntarily dismissed their complaints without prejudice.

- 26 -

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

PART II.

ITEM 5.

MARKET FOR REGISTRANT’S COMMON

EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

~~Refer to “Note About Forward-Looking Statements” following the Index in front of this Form~~

~~10-K~~

~~and Item 1A “Risk Factors” on pages 11 through 20 of this Annual Report.~~

Market Information

Our common stock trades on the NASDAQ Global Select Market under the symbol VIVO.

Holders of our Common Stock

As of September 30, ~~2019,~~2022, there were approximately ~~600~~490 holders of record and approximately ~~10,550~~23,850 beneficial owners of our common shares.

Dividends

~~“Quarterly Financial Data (Unaudited)” relating to our dividends in Note 11 of the Consolidated Financial Statements are incorporated herein by reference.~~

~~Effective during the second quarter of fiscal~~

During 2019, the Company suspended the payment of ~~its~~a quarterly cash dividend ~~which had previously been established at an indicated annual cash dividend rate of $0.50 per share for each of fiscal 2019, 2018 and 2017. The dividend was suspended~~ as part of the Company’s regular evaluation of its capital allocation, with the action taken in order to deploy cash into new product development activities ~~for the Revogene molecular diagnostic platform, as well as the Curian and PediaStat platforms, among other investments,~~ and to preserve capital resources and liquidity for general corporate purposes. ~~The~~Any declaration and amount of

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~~Table of Contents~~

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. We paid dividends~~and any other factors the board of ~~$0.25, $0.50 and $0.575 per share in fiscal 2019, 2018 and 2017, respectively.~~

directors determines are relevant to its evaluation. At this time, we do not expect to resume paying cash dividends.

Stock Total Return Performance

The graph below ~~matches~~compares the cumulative

5-Year

total return ~~of holders of~~realized by shareholders on Meridian Bioscience, Inc.’s common stock ~~with~~relative to the cumulative total returns of the NASDAQ Composite index and a customized peer group comprised of ~~eight companies that includes:~~

the following ten companies:

Bio-Rad

Laboratories, Inc., Bio-Techne Corporation, bioMerieux S.A., ~~GenMark Diagnostics,~~DiaSorin S.p.a., Hologic, Inc., ~~Luminex Corporation,~~ Myriad Genetics, Inc., OraSure Technologies, Inc., ~~Quidel~~Qiagen N.V., QuidelOrtho Corporation, and Trinity Biotech Plc. ~~We selected the companies in the customized peer group based on various considerations, including, without limitation, industry classifications, the extent~~

An investment of $100 (with reinvestment of all dividends) is assumed to which certain companies may engage in businesses in which we engage, and the extent to which we and/or our investors consider certain companies to be direct or indirect competitors. The graph assumes that the value of the investmenthave been made in our common stock, in ~~each~~the index and in the peer group (including reinvestment of dividends) ~~was $100~~ on September 30, ~~2014~~2017, and ~~tracks it~~its relative performance is tracked through September 30, ~~2019.~~2022.

- 27 -

~~- 23 -~~

Lead Testing Matters

On September 1, 2021, the Company’s wholly owned subsidiary Magellan announced the expansion of the Class I voluntary recall of its ~~Safety Notification related to Magellan’s~~ LeadCare

~~testing systems~~ test kits for ~~venous~~the detection of lead in blood, ~~samples, issued to Magellan~~which it had initiated in May 2021 after identifying an issue in certain manufactured lots of its ~~Form 483, Inspectional Observations. The FDA issued a related Warning Letter on October 23, 2017.~~LeadCare test kits. As a result of ~~these activities, during our 2017 third fiscal quarter,~~the identified issue, impacted test kit lots could potentially underestimate blood lead levels when processing patient blood samples. Although it was ~~determined~~initially believed that ~~a potential impairment~~the root cause of ~~goodwill recorded in connection~~the issue related to the plastic containers used for the treatment reagent, additional studies have indicated that the root cause related to the third-party-sourced cardboard trays that held the treatment reagent containers. Upon correction of the identified supplier issue, shipment of product resumed during the second quarter of fiscal 2022. The Company continues to work closely with the ~~acquisition of Magellan had occurred (i.e., a “triggering event”). An impairment charge of $6,628, on both a~~

~~pre-tax~~

~~and~~

~~after-tax~~

~~basis, was recorded during the fiscal 2017 third quarter as set forth~~FDA in ~~Note 1(h),~~

~~“Summary of Significant Accounting Policies – Intangible Assets”~~

its execution of the ~~accompanying~~recall activities, which has included Magellan notifying customers and distributors affected by the recall and providing instructions for the return of impacted test kits. Of the $5,100 estimated and accrued as of September 30, 2021 to cover the estimated costs of the recall, it was estimated at September 30, 2022 that the remaining costs of the recall exceeded the amount accrued, and as a result, an adjustment was made to the product recall reserve. The effect of this adjustment is reflected in product recall costs (adjustment) within the Consolidated ~~Financial Statements.~~ Statement of Operations for the year ended September 30, 2022, and results in approximately $430 of remaining accrued product recall costs reflected in the Consolidated Balance Sheet as of September 30, 2022. Anticipated recall-related costs primarily include temporary labor costs, product replacement and/or refund costs, mailing/shipping costs, attorneys’ fees and other miscellaneous costs.

As ~~also previously disclosed and set forth~~described in Item 3. “Legal Proceedings”, on April 17, 2018, the Company’s wholly owned subsidiary Magellan received a subpoena from the ~~United States~~U.S. Department of Justice (“DOJ”) regarding its LeadCare product line. The subpoena ~~outlines~~outlined documents to be produced, and ~~we continue to cooperate~~the Company is cooperating with the DOJ in this ~~matter,~~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, including responding to additional information ~~requests. We~~requests that have followed receipt of the subpoena in April 2018. The Company has executed tolling agreements to extend the statute of limitations.

In March and April 2021, DOJ issued two subpoenas, both to former employees of Magellan, calling for witnesses to testify before a federal grand jury related to this matter. In September and October 2021, DOJ issued additional subpoenas to individuals seeking testimony and documents in connection with its ongoing investigation. It is the Company’s understanding that multiple witnesses have testified before the federal grand jury and the DOJ’s investigation is ongoing. Discussions continue with the DOJ to explore resolution of the matter. As of September 30, 2022, in accordance with applicable accounting guidance, the Company believes a loss is probable in the DOJ LeadCare legal matter and has accrued $10,000 as an estimate of the cost to resolve the DOJ LeadCare legal matter, which is reflected in litigation and select legal costs within the Consolidated Statement of Operations for the year ended September 30, 2022. The Company cannot predict when the investigation will be resolved or the outcome of the investigation, and the ultimate resolution of the DOJ LeadCare legal matter may exceed the amount accrued at September 30, 2022 and could be material to the Company. Expense for attorneys’ fees related to this matter totaling $3,510, $2,803 and $2,035 is included within the Consolidated Statements of Operations for the years ended September 30, 2022, 2021 and 2020, respectively.

Magellan submitted 510(k) applications in December 2018, seeking to reinstate venous blood sample-types for its LeadCare

II, LeadCare

Plus

™

and LeadCare Ultra

testing systems. In the second fiscal quarter of 2019, the FDA informed Magellan that each of these 510(k) applications had been put on Additional Information hold. On July 15, 2019, we provided responses to the FDA’s requests for Additional Information. These 510(k) applications have since expired and are no longer under FDA review. Further, while Magellan’s LeadCare testing systems remain cleared for marketing by the FDA and permitted for use with capillary blood samples, the FDA advised that it has commissioned a third-party study of ~~Magellan’s~~the Company’s LeadCare testing systems using both venous and capillary blood samples. According to the FDA, the results of the field study will be used in conjunction with other information to determine whether further action by the FDA or the ~~Centers for Disease Control and Prevention~~CDC is necessary to protect the public health. ~~Meridian~~The Company intends to fully cooperate with the FDA asor CDC on any follow-up based on the third-party ~~study is completed.~~study.

- 32 -

During October 2019, the FDA performed a

follow-up

inspection of Magellan’s manufacturing facility. The FDA issued five Form FDA 483 observations. ~~In November 2019,~~On March 18, 2020, we ~~submitted to~~participated in a regulatory meeting with the FDA at the FDA’s request to further discuss the Form FDA 483 observations and our remediation efforts. Since the inspection, we have submitted a number of written responses to the FDA regarding the five Form FDA 483 observations issued in the October 2019 inspection, and have ~~implemented~~worked diligently to execute a remediation ~~plan~~plan. During October 2020, the FDA issued Establishment Inspection Reports which closed out the inspections from June 2017 and October 2019 under 21 C.F.R.20.64(d)(3).

During June 2021, the FDA performed an inspection of Magellan’s manufacturing facility. As a result of this inspection, the FDA issued one Form 483 observation. On August 3, 2021, FDA sent Magellan a close-out letter for the Warning Letter that FDA issued to Magellan on October 23, 2017. FDA’s close-out letter notified Magellan that FDA has completed an evaluation of Magellan’s corrective actions in response to FDA’s Warning Letter, and based on FDA’s evaluation, Magellan has addressed the issues identified in the Warning Letter. FDA’s close-out letter also stated that future FDA inspections of Magellan and regulatory activities will further assess the adequacy and sustainability of Magellan’s corrections.

Results of Operations

Fourth Quarter

Net earnings for the fourth quarter of fiscal 2022 decreased 14% to $5,705, or $0.13 per diluted share, from net earnings for the fourth quarter of fiscal 2021 of $6,657, or $0.15 per diluted share. The level of net earnings in the fourth quarter of fiscal 2022 results primarily from the decline in net revenues and operating income in our Life Science segment, stemming from the continued softening in demand for COVID-19 related reagents during the quarter. As it relates to our Life Science segment net revenues, a significant number of our Life Science segment customers now use our molecular reagents in multiple tests, including non-COVID-19 related tests. This development makes it increasingly difficult to accurately estimate the portion of molecular reagent sales related specifically to COVID-19. As a result, we are ~~actively working. While we remain committed~~no longer reporting the portion of Life Science segment net revenues related to ~~strengthening Magellan’s quality system~~COVID-19. Such net revenues were identified and ~~ensuring that all aspects~~reported throughout fiscal 2021 and totaled approximately $23,300 in the fourth quarter of fiscal 2021. By contrast, the fourth quarter of fiscal 2021 was adversely affected by approximately $5,600, or $0.10 per diluted share, of LeadCare product recall expenses and a $4,596, or $0.08 per diluted share, upward adjustment to the fair value of acquisition consideration related to the acquisition of the ~~system~~business of GenePOC, Inc. (“GenePOC”) (i.e., incremental expense), offsetting the impact of higher net revenues and resulting gross profit.

Consolidated net revenues for the fourth quarter of fiscal 2022 totaled $65,675, a decrease of 14% compared to the fourth quarter of fiscal 2021.

Net revenues from the Diagnostics segment for the fourth quarter of fiscal 2022 increased 14% to $39,187, compared to the fourth quarter of fiscal 2021, comprised of a 22% increase in non-molecular assay products, partially offset by a 27% decrease in molecular assay products. Non-molecular assay product sales include the addition of sales of the BreathTek product, which was acquired July 31, 2021. The fourth quarter of fiscal 2022 represents the sixth consecutive quarter our Diagnostics segment has shown positive revenue growth versus the same quarter in the prior fiscal year. Our Diagnostics segment generated a $122 operating loss for the fourth quarter of fiscal 2022, compared to an operating loss of $11,680 in the fourth quarter of fiscal 2021, largely due to the fiscal 2021 fourth quarter including $5,600 of LeadCare product recall expenses and $4,596 upward adjustment to the fair value of acquisition consideration related to the acquisition of the business of GenePOC (i.e., incremental expense) (see Note 3, “Fair Value Measurements” of the Consolidated Financial Statements).

With a 53% decrease in net revenues from molecular reagents products and an 8% decrease in net revenues from immunological reagents products, net revenues for our Life Science segment decreased 37% to $26,488 during the fourth quarter of fiscal 2022 compared to the fourth quarter of fiscal 2021. Our Life Science segment generated $10,064 of operating income, or a margin of 38%, for the fourth quarter of fiscal 2022, a decrease of $13,118 from $23,182, or a margin of 55%, achieved in the fourth quarter of fiscal 2021, primarily due to the decrease in net revenues and associated gross profit margins, resulting in large part from the immunological reagent products representing a higher percentage of net revenues, as described in the respective sections below.

- 33 -

Fiscal Year

Net earnings for fiscal 2022 decreased 41% to $42,459, or $0.96 per diluted share, from net earnings for fiscal 2021 of $71,407, or $1.62 per diluted share. The level of net earnings in fiscal 2022 reflects primarily: (i) the overall increase in operating expenses described in the Operating Expenses section below; and (ii) the decrease in gross profit margins resulting from immunological reagent products representing a higher percentage of both Life Science segment and total consolidated net revenues in the fiscal 2022 period, compared to higher margin molecular reagent products in the fiscal 2021 period. As previously noted, we are no longer reporting the portion of Life Science segment net revenues related to COVID-19, noting that such net revenues totaled approximately $111,900 in ~~full compliance, we can provide no assurance that our remediation efforts will be successful~~fiscal 2021.

Consolidated net revenues for fiscal 2022 totaled $333,018, an increase of 5% compared to fiscal 2021.

Diagnostics segment net revenues increased 22% to $155,903 in fiscal 2022, comprised of a ~~degree acceptable~~27% increase in non-molecular assay products including the addition of sales of the BreathTek product, which was acquired July 31, 2021, partially offset by a 5% decrease in molecular assay products. Our Diagnostics segment generated operating income of $2,982 in fiscal 2022, compared to an operating loss of $7,280 in fiscal 2021. This year over year improvement in operating income resulted primarily from the combined effects of: (i) the Diagnostics segment’s increase in net revenues; and (ii) fiscal 2021 including $5,600 of LeadCare product recall expenses. These factors contributing to the improvement in operating margin were partially offset by the ~~FDA.~~

~~- 25 -~~

~~Table~~effect of ~~Contents~~

~~During~~lower gross profit margins and increase in operating expenses described in the respective sections below.

With a 30% decrease in net revenues from molecular reagents products and a 43% increase in net revenues from immunological reagents products, including COVID-19 related products, net revenues for our Life Science segment decreased 7% to $177,115 during fiscal ~~2019, 2018 and 2017, we incurred approximately $1,800~~2022 compared to fiscal 2021. Our Life Science segment generated $86,040 of operating income in ~~aggregate remediation costs,~~fiscal 2022, a decrease of $28,974 from fiscal 2021, primarily ~~related to regulatory consultants and studies required to reinstate our venous blood sample claim. In the course of remediation, we may encounter additional matters that warrant notifications~~due to the ~~FDA and/or customers regarding~~decrease in net revenues and gross profit margins, resulting from the ~~use~~aforementioned mix of ~~our products. At this time, we do not believe that any such notifications would impact~~products sold, and the ~~ability to use the LeadCare systems with capillary blood samples.~~

~~While we remain confident~~increase in operating expenses, as described in the performance of the Magellan LeadCare testing systems using capillary samples, we do not expect that the FDA will reinstate our venous blood claims. We can provide no assurance that the ongoing investigation and study of the DOJ and FDA, respectively, or future exercise of their respective enforcement, regulatory, discretionary or other powers will not result in findings or alleged violations of federal laws that could lead to enforcement actions, proceedings or litigation and the imposition of damages, fines, penalties, restitution, other monetary liabilities, sanctions, injunctions, settlements or changes to our business practices, product offerings or operations that could have a material adverse effect on our business, financial condition or results of operations; or eliminate altogether our ability to operate our lead testing business, or on terms substantially similar to those on which we currently operate.

sections below.

REVENUE OVERVIEW

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

- By Geographic Region

- By Product Platform/Type

Revenue ~~Overview-~~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 Quebec City, Canada, and manufacturing operations for products detecting elevated lead levels in blood in Billerica, Massachusetts (near Boston). These diagnostic test products are sold and distributed in the countries comprising North and Latin 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 the sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, and bioresearch reagents domestically and abroad, including a sales and business development facility, with outsourced distribution capabilities, in Beijing, China to further pursue growing revenue opportunities in Asia.

Revenues for the Diagnostics segment, in the normal course of business, may be affected from ~~quarter~~year to ~~quarter~~year by buying patterns of major distributors and reference laboratories, seasonality and ~~the~~ severity of seasonal diseases and outbreaks (including the ongoing COVID-19 pandemic), and foreign currency exchange rates. Revenues for the Life Science segment, in the normal course of business, may be affected from ~~quarter~~year to ~~quarter~~year by buying patterns of major IVD manufacturing customers, severity of disease outbreaks (specifically the ongoing COVID-19 pandemic), and foreign currency exchange rates.

See ~~the “Revenue Disaggregation” section of~~ Note 1,

2, “~~Significant Accounting Policies”~~

Revenue Recognition”of the ~~accompanying~~ Consolidated Financial Statements for detailed revenue disaggregation information.

Following is a discussion of the net revenues generated by these product platforms/types and/or disease states:

Diagnostics Segment Products

The ~~acquisition~~Diagnostics segment’s overall 22% growth in net revenues during fiscal 2022 primarily results from the combined effects of the ~~Revogene molecular diagnostics platform,~~following:

Volume growth in the ~~development~~gastrointestinal product family, including the benefit of a full year of net revenues from sales of the ~~Curian immunoassay platform, and the expansion~~BreathTek product, acquired in late July 2021 (total increase in gastrointestinal product revenue of ~~the related assay-menu for each~~27% in fiscal 2022, including approximately $23,100 of ~~these platforms are important steps~~net revenues from BreathTek);

- 34 -

Volume growth in ~~addressing competitive pressures in our gastrointestinal and~~sales of respiratory illness ~~assay families. We are actively converting our existing Alethia install base to the Revogene platform for~~

~~C. difficile~~

~~, Group A~~

~~Streptococcus~~

~~and Group B~~

~~Streptococcus~~

assays. During our first 120 days since acquiring the Revogene platform, we have approximately 60 instrument installations. For the Curian immunoassay diagnostics platform, we submitted a 510(k) for the instrument and first assay, a test for

~~H. pylori~~

~~antigen in stool, in September 2019. We believe the advantages~~products, comprised of ~~the Curian analyzer will help protect our existing rapid test accounts.~~

~~- 26 -~~

~~Table of Contents~~

~~Gastrointestinal Assays~~

~~During fiscal 2019, revenues from our gastrointestinal products, which include~~ tests for

~~C. difficile~~

~~H. pylori~~

and certain foodborne pathogens, among others, totaled $68,977. This represents a 13% decrease from fiscal 2018 and follows a less than 1% increase during fiscal 2018. We continue to face pricing and volume pressures within this product category that will carry into fiscal 2020 and beyond for our current products. We have executed multi-year supply agreements with our two largest reference laboratory customers for

~~H. pylori~~

tests to secure volume, albeit at lower selling prices. We continue to believe there are ongoing benefits to be realized from our partnerships with managed care companies in promoting: (i) the health and economic benefits of a test and treat strategy; (ii) changes in policies that discourage the use of traditional serology methods and promote the utilization of active infection testing methods; and (iii) physician behavior movement away from serology-based testing and toward direct antigen testing.

~~Contributing to the competitive pressures being faced in this product category, the patents for our~~

~~H. pylori~~

~~products, owned by us, expired in May 2016 in the U.S. and in May 2017 in countries outside the U.S. We expect competition with respect to our~~

~~H. pylori~~

products to continue to increase, and 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 October 2018, we entered into a strategic collaboration with DiaSorin to sell

~~H. pylori~~

~~tests, one of only three other companies that market~~

~~FDA-cleared~~

~~tests to detect~~

~~H. pylori~~

antigen in stool samples in the U.S. market. We are unable to provide assurances that we will be successful with any strategy or that any strategy will prevent an adverse effect on our future results of operations and liquidity, including revenues and gross profit.

~~Respiratory Illness Assays~~

~~Including tests for influenza, RSV,~~ Group A Strep, ~~Pertussis, and~~ Mycoplasma pneumonia, Influenza, and Pertussis, among others, ~~our~~reflecting an increase in the testing for these illnesses compared to fiscal 2021 in the midst of the COVID-19 pandemic (total increase in respiratory illness ~~product revenues decreased 8%~~products of 51% in fiscal ~~2019, following a 21% increase~~2022);

Volume declines from sales of blood chemistry products due to the ongoing LeadCare product recall, which commenced in May 2021, with shipment of product resuming in the second quarter of fiscal 2022 (approximately $1,200 decrease in net revenues in fiscal ~~2018. These revenue levels reflect a lighter 2018 – 2019 respiratory season, as~~2022, compared to ~~the particularly strong 2017 – 2018 respiratory season, as measured by the rate of laboratory-confirmed influenza hospitalizations (published by the CDC).~~

~~Blood Chemistry Assays~~

~~Revenues from our sale of products to test for elevated levels of lead in blood remained relatively flat during~~ fiscal ~~2019 at $19,082. This follows fiscal 2018 revenues from such products increasing 5% over fiscal 2017. Nominal favorable pricing offset nominal volume declines in fiscal 2019.~~2021); and

•

Ongoing pricing pressure on our H. pylori stool antigen tests, which contributed approximately $2,200 of unfavorable price variance from customers in the U.S.

Life Science Segment Products

During fiscal ~~2019,~~2022, net revenues ~~from our~~for the Life Science segment ~~increased 2%, with~~decreased 7% from fiscal 2021. While the level of net revenues ~~from molecular reagent sales decreasing 5% compared to~~during fiscal ~~2018 and~~2022 reflects the significant decline in demand for COVID-19 related reagents during the last half of fiscal year 2022, such level of net revenues ~~from immunological reagent sales increasing 6%. Life Science segment~~significantly outpaced the net revenues ~~increased 10%~~generated in fiscal ~~2018, with revenues from molecular reagent sales increasing 12% compared to fiscal 2017~~2020 (partial pandemic) and revenues from immunological reagent sales increasing 9%. Our Life Science segment’s growth was impacted by the movement in currency exchange rates since fiscal 2018, with revenues increasing 3% on a constant-currency basis over fiscal 2018. During fiscal 2019 ~~our Life Science segment continued to benefit from sales into China, with such sales totaling approximately $8,400 during fiscal~~(pre-pandemic) as follows:

Fiscal 2020

Increased 34% in total; 17% for molecular reagents and 58% for immunological reagents

Fiscal 2019 ~~– representing an approximate 1% increase over fiscal 2018.~~

Increased 175% in total; 295% for molecular reagents and 108% for immunological reagents

Foreign Currency

Fluctuations in foreign currency exchange rates ~~since~~in fiscal ~~2018~~2022 compared to fiscal 2021 had an approximate ~~$2,200~~$5,200 unfavorable impact on fiscal ~~2019~~2022 consolidated net revenues; ~~$1,150~~$1,700 within the Diagnostics segment and ~~$1,050~~$3,500 within the Life Science segment. This compares to

year-to-year

currency exchange rates having an approximate ~~$2,200~~$9,200 favorable impact on consolidated net revenues in fiscal ~~2018; $1,400~~2021; $1,300 within the Diagnostics segment and ~~$800~~$7,900 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 earnings was not significant during fiscal 2019, 2018 or 2017.

Significant Customers

Revenue concentrations related to certain customers within our Diagnostics and Life Science segments are set forth in Note 915, “Reportable Segments and Major Concentration Data” of the ~~accompanying~~ Consolidated Financial Statements.

~~- 27 -~~

~~Table~~

Gross Profit:


	2022			2021			2022 vs. 2021 Inc (Dec)
Gross Profit	$	188,356		$	201,148			(6	)%
Gross Profit Margin		57	%		63	%		-6 points

Overall gross profit margins during fiscal 2022 have been unfavorably impacted by a decline in net revenues from our Life Science segment’s molecular reagent products, which are some of ~~Contents~~

~~Gross Profit:~~

2019

2018

2017

2019 vs.
2018
Inc (Dec)

2018 vs.
2017
Inc (Dec)

Gross Profit
$
118,325
$
130,697
$
124,292

(9
%)
5
%
Gross Profit Margin

59
%
61
%
62
%
-2 points

-1 point

~~The~~our highest margin products. During fiscal 2022, approximately 28% of consolidated net revenues related to sales of molecular reagent products, compared to approximately 41% during fiscal 2021, which included the peak of the COVID-19 pandemic.

Additionally, overall gross profit ~~margin decrease~~margins in fiscal 2022 have been unfavorably impacted in our Diagnostics segment by the previously discussed LeadCare product recall (see “Lead Testing Matters” above) and production capacity ramp-up costs at our Cincinnati and Quebec Revogene manufacturing facilities.

- 35 -

Operating Expenses—Segment Detail and Corporate


	Research & Development		Selling & Marketing		General & Administrative		Other ⁽¹⁾		Total Operating Expenses
Fiscal 2021:
Diagnostics	$	21,406	$	21,430	$	24,055	$	5,079	$	71,970
Life Science		2,505		5,350		13,501		—		21,356
Corporate		—		—		11,985		2,803		14,788

Total 2021 Expenses	$	23,911	$	26,780	$	49,541	$	7,882	$	108,114

Fiscal 2022:
Diagnostics	$	21,424	$	24,268	$	28,563	$	759	$	75,014
Life Science		2,911		7,005		14,176		152		24,244
Corporate		—		—		14,409		20,298		34,707

Total 2022 Expenses	$	24,335	$	31,273	$	57,148	$	21,209	$	133,965

(1)	Product recall expenses are included within the Diagnostics segment’s fiscal 2021 other expenses, while the Diagnostics segment’s fiscal 2022 other expenses include an adjustment to the accrual for such product recall costs.

Operating expenses in fiscal 2022 increased $25,851 to $133,965. Major components of this increase were as follows:

Increased Selling & Marketing costs in both the Diagnostics and Life Science segments, primarily reflecting the effects of filling certain open positions and the easing of certain travel and meeting restrictions imposed during ~~fiscal 2019~~the prior years in connection with the COVID-19 pandemic;

Increased General & Administrative costs, primarily ~~results from~~reflecting the combined effects of: (i) ~~previously-noted pricing changes within our~~

~~H. pylori~~

~~product line; (ii) mix of products sold, particularly decreased contribution from certain of our higher margin gastrointestinal assays; (iii) production capacity~~

~~ramp-up~~

costs for our newly acquired Quebec facility where Revogene instruments and test devices are made; and (iv) operating segment mix. The overall decrease in the gross profit margin from fiscal 2017 to fiscal 2018 reflects the combined effects of: (i) pricing pressure in our Diagnostics segment; (ii) mix of products sold, particularly decreased contribution from certain of our higher margin gastrointestinal assays; and (iii) operating segment mix.

~~Operating Expenses -~~

~~Segment Detail~~

Research &
Development

Selling &
Marketing

General &
Administrative

Other

Total Operating
Expenses

Fiscal 2017:

Diagnostics
$
13,433
$
22,942
$
13,268
$
6,628
$
56,271

Life Science

2,603

9,446

7,493

—

19,542

Corporate

—

—

10,335

762

11,097

Total 2017 Expenses
$
16,036
$
32,388
$
31,096
$
7,390
$
86,910

Fiscal 2018:

Diagnostics
$
13,742
$
25,002
$
19,397
$
4,032
$
62,173

Life Science

3,047

9,466

8,111

1,240

21,864

Corporate

—

—

7,297

7,779

15,076

Total 2018 Expenses
$
16,789
$
34,468
$
34,805
$
13,051
$
99,113

Fiscal 2019:

Diagnostics
$
14,711
$
23,058
$
19,191
$
3,446
$
60,406

Life Science

3,237

5,388

6,034

188

14,847

Corporate

—

—

7,777

2,596

10,373

Total 2019 Expenses
$
17,948
$
28,446
$
33,002
$
6,230
$
85,626

~~- 28 -~~

~~Table of Contents~~

~~Operating Expenses -~~

~~Comparisons to Prior Year~~

~~Periods~~

Research &
Development

Selling &
Marketing

General &
Administrative

Other

Total Operating
Expenses

2017 Expenses
$
16,036
$
32,388
$
31,096
$
7,390
$
86,910

% of Revenues

8
%
16
%
15
%
4
%
43
%
Fiscal 2018 Increases (Decreases):

Diagnostics

309

2,060

6,129

(2,596
)
5,902

Life Science

444

20

618

1,240

2,322

Corporate

—

—

(3,038
)
7,017

3,979

2018 Expenses
$
16,789
$
34,468
$
34,805
$
13,051
$
99,113

% of Revenues

8
%
16
%
16
%
6
%
46
%
% Increase

5
%
6
%
12
%
77
%
14
%
Fiscal 2019 Increases (Decreases):

Diagnostics

969

(1,944
)
(206
)
(586
)
(1,767
)
Life Science

190

(4,078
)
(2,077
)
(1,052
)
(7,017
)
Corporate

—

—

480

(5,183
)
(4,703
)

2019 Expenses
$
17,948
$
28,446
$
33,002
$
6,230
$
85,626

% of Revenues

9
%
14
%
16
%
3
%
43
%
% Increase (Decrease)

7
%
(17
%)
(5
%)
(52
%)
(14
%)

~~Total operating expenses fluctuated during fiscal 2019 and fiscal 2018 primarily as a result of the combined effects of the following:~~

~~Fiscal 2019 decrease~~

Increased Research & Development costs, reflecting the addition of the GenePOC business expenses for the development of the GI and RI panel assays since the June 3, 2019 date of acquisition being more than offset by the decreased expenditures resulting from the timing of product development projects and the clinical trials for our cCMV test in fiscal 2018;

~~Decreased Selling & Marketing costs due to: (i) the effects of the fiscal 2018 organization streamlining initiatives;~~increased purchase accounting amortization expense; and (ii) ~~lower sales commissions resulting from the decrease~~additional investment in ~~sales levels;~~

Decreased General & Administrative costs, reflecting the effects of the fiscal 2018 organization streamlining initiatives and lower Quality System remediation costs related to our blood-lead manufacturing facility, partially offset by the addition of the GenePOC business expenses, including purchase accounting amortization; and

~~Decreased restructuring & selected legal costs, along with the effects of the fiscal 2019 acquisition-related costs (reflected within “Other” in the above tables).~~

~~Fiscal 2018 increase~~

Increased Selling & Marketing costs, reflecting increased commission and bonus payments made in connection with the increased revenue levels, along with costs associated with the new branding strategy;

~~Increased General & Administrative costs due in large part~~incentive compensation tied to the ~~cash incentive compensation resulting from the revenue~~Company’s financial performance;

A $6,548 increase in acquisition and ~~net earnings results achieved, along with increased Quality System remediation~~transaction related costs, ~~related to Magellan;~~

~~- 29 -~~

~~Table of Contents~~

~~Increased restructuring costs, reflecting: (i) compensation~~primarily within Corporate and benefits for our previous Executive Chairman and CEO throughout fiscal 2018, the period during which we also have the compensation and benefits of a new CEO; and (ii) the costs of terminations and related expenses incurred in connection with realigning our business structure; and

~~Increased legal costs~~ related to the ~~matters~~previously discussed pending merger (see “Agreement and Plan of Merger” above); and

A $10,707 increase in ~~Item 3. “Legal Proceedings”~~litigation and select legal costs, reflected within Corporate and primarily related to the previously discussed LeadCare legal matter (see “Lead Testing Matters” above).

Offsetting these increases was a $5,946 total net decrease in product recall costs within our Diagnostics segment, primarily related to the LeadCare product recall initiated in fiscal 2021.

Operating Income

Operating income ~~increased 4%~~decreased 42% in fiscal ~~2019,~~2022, following a ~~15% decrease~~52% increase in fiscal ~~2018,~~2021, as a result of the factors discussed ~~above, including the acquisition-related, restructuring and selected legal costs in each of the fiscal years and the Magellan goodwill impairment charge in fiscal 2017.~~

above.

Other ~~Income and~~ Expense

Other ~~income and~~ expense, ~~in fiscal 2019, 2018 and 2017 includes~~net primarily includes: (i) interest costs on the Company’s long-term borrowings ~~which are comprised~~and contingent grant obligations due to the Israel Innovation Authority; (ii) grant income under the RADx initiative (fiscal 2021; see Note 14, “National Institutes of Health Contracts” of the ~~following during these~~Consolidated Financial Statements); (iii) a $935 gain on the termination of interest rate swap contracts (fiscal 2022); and (iv) net currency gains and losses. Interest costs related to the revolving credit facility with a commercial bank were $1,057 and $1,420 in fiscal ~~years:~~

~~Draws~~2022 and 2021, respectively. The varying levels of interest costs on the revolving credit facility ~~used to fund acquisition~~reflect the following approximate levels of average debt outstanding, as detailed in Note 10, “Bank Credit Arrangements” of the ~~business of GenePOC~~Consolidated Financial Statements: (i) fiscal 2022-$39,233; and pay off the term loan used to fund the March 2016 acquisition of Magellan (May 2019 – September 2019), bearing interest at a fluctuating rate tied to, at the Company’s option, either the federal funds rate or LIBOR.(ii) fiscal 2021-$56,505.

- 36 -

~~Term loan used to fund the acquisition of Magellan (March 2016 – May 2017), bearing interest at an effective rate of 2.76%.~~

Income Taxes

The effective rate for income taxes was ~~23%,~~22% and 21% ~~and 41%~~ for fiscal ~~2019, 2018~~2022 and ~~2017,~~2021, respectively. ~~These~~The increase in effective tax rates ~~reflect~~primarily results from the ~~combined effect of various components~~anticipated non-deductibility of the previously discussed DOJ LeadCare legal matter (see “Lead Testing Matters” above), partially offset by various tax ~~reform act (see Note 6,~~

~~“Income Taxes”~~

effects associated with the Company’s currently unremitted earnings of ~~the accompanying Consolidated Financial Statements) including: (i) the lowering of the applicable tax rate; (ii) the accompanying~~

~~re-measurement~~

of deferred tax balances at the lower rate; and (iii) the various foreign-income related items, such as the repatriation transition tax, the tax deduction related to Foreign Derived Intangible Income, and the tax related to Global Intangible

~~Low-Taxed~~

~~Income and foreign tax credits.~~

international subsidiaries.

Impact of Inflation

To the extent feasible, we have consistently followed the practice of ~~adjusting~~reviewing our prices to ~~reflect~~consider the ~~impact~~impacts of inflation on salaries and fringe benefits for employees, ~~and~~ the cost of purchased materials and ~~services.~~services, and transportation costs. Inflation and changing prices did not have a material adverse impact on our gross margin, net revenues or operating income in fiscal ~~2019, 2018~~2022 or ~~2017.~~

fiscal 2021.

Liquidity and Capital ~~Resources~~

Resources:

Liquidity

Our cash flow and financing requirements are determined by analyses of operating and capital spending budgets and debt ~~service, and consideration of common share dividends.~~service. We have historically maintained a credit facility to augment working capital requirements and to respond quickly to acquisition opportunities.

We have an investment policy that guides the holdings of our investment portfolio, which presently consists of bank savings accounts and institutional money market ~~mutual~~ funds. Our objectives in managing the investment portfolio are to: (i) preserve capital; (ii) provide sufficient liquidity to meet working capital requirements and fund strategic objectives such as acquisitions; and (iii) capture a market rate of return commensurate with market conditions and our policy’s investment eligibility criteria. As we look forward, we will continue to manage the holdings of our investment portfolio with preservation of capital being the primary objective.

~~- 30 -~~

~~Table of Contents~~

~~Considering the various worldwide~~

~~geo-political~~

~~and~~

~~geo-economic~~

conditions (including Brexit, as more fully discussed within the “Risk Factors” section of Part 1A), we do not expect macroeconomic 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 from current cash flows from operating activities and cash on ~~hand. If~~hand, and such sources are anticipated to be adequate to fund working capital requirements, capital expenditures and debt service during the next twelve months. However, if needed, we also have an additional source of liquidity through the amount remaining available on our ~~$125,000~~$200,000 bank revolving credit facility, which totaled ~~approximately $49,200~~$175,000 as of September 30, ~~2019.~~2022. The Company also maintains a shelf registration statement on file with the SEC. Our liquidity needs may change if overall economic conditions worsen and/or liquidity and credit within the financial markets tightens for an extended period, ~~of time,~~ and such conditions impact the collectability of our customer accounts receivable, impact credit terms with our vendors, or disrupt the supply of raw materials and services.

As of September 30, ~~2019,~~2022, our cash and cash equivalents balance ~~is $62,397 or $2,634 higher than at the end~~was $81,453, an increase of ~~fiscal 2018.~~$31,682 compared to September 30, 2021. This net increase primarily results ~~in large part~~ from the combined net effects of: (i) generating $82,361 of cash ~~flows~~flow from ~~operating activities being more than sufficient~~operations, an increase of 23% over fiscal 2021; (ii) using cash to ~~cover capital expenditures, shareholder dividends for two quarters~~pay down $35,000 on the revolving credit facility; (iii) using cash to acquire property, plant and ~~debt service. Net~~equipment ($7,365 net of RADx grant monies received); and (iv) acquiring EUPROTEIN, Inc. ($3,750) (see Note 4, “Business Combinations” of the Consolidated Financial Statements). In addition, the net balance of cash ~~flows from operating activities~~ and cash equivalents was reduced by approximately $5,300 as of September 30, 2022, as a result of the movement in foreign currency exchange rates, specifically the British pound and Euro, since September 30, 2021.

Considering these factors, our balance of cash and cash equivalents on hand ~~are anticipated~~exceeded our total debt (defined as bank debt, government grant obligations and obligations related to ~~be adequate to fund working capital requirements, capital expenditures and debt service during the next 12 months.~~

Following the declaration of a $0.125 first quarter cash dividend consistent with the previously established $0.50 per share annual indicated dividend rate, effective for the second quarter of fiscal 2019, we suspended the payment of our quarterly cash dividend. The dividend was suspended as part of our regular evaluation of capital allocation, with the action taken in order to deploy cash into new product development activities for the Revogene molecular diagnostic platform, as well as the Curian and PediaStat platforms, among other investments, and to preserve capital resources and liquidity for general corporate purposes.

acquisitions) by approximately $49,700 at September 30, 2022.

Capital Resources

As described in Note 5,

10, “Bank Credit Arrangements”

of the ~~accompanying~~ Consolidated Financial Statements, ~~on May 24, 2019, in connection with the acquisition of the GenePOC business,~~ the Company ~~executed~~maintains a ~~new five-year $125,000 revolving~~$200,000 credit facility, ~~to replace our previously-existing $30,000 credit facility. The new credit facility~~which is secured by substantially all of our U.S. assets and includes certain restrictive financial covenants. ~~To date, we have drawn down $75,824~~As of September 30, 2022, the Company was in compliance with all covenants. The Company also maintains a shelf registration statement on ~~this new facility, using~~file with the ~~proceeds to repay our previously-existing term loan and, along with cash~~

~~on-hand,~~SEC.

- 37 -

~~fund the acquisition of the GenePOC business.~~

Our capital expenditures totaled ~~$3,797~~$8,615 for fiscal ~~2019~~2022, $1,250 of which was offset by receipts under the RADx grant initiative (see Note 14, “National Institutes of Health Contracts” of the Consolidated Financial Statements), and ~~were~~which largely related to ~~laboratory and~~expanding manufacturing ~~equipment.~~capacity. During fiscal ~~2020~~2023, our capital expenditures are estimated to ~~range between~~total approximately ~~$4,000 to $5,000, with~~$10,000, comprised of approximately $6,500 and $3,500 in the ~~actual amount dependent upon actual operating results~~Diagnostics and ~~the phasing of certain projects.~~Life Science segments, respectively. Such expenditures may be funded with cash and cash equivalents on hand, operating cash flows, and/or availability under the ~~$125,000~~$200,000 revolving credit facility discussed above.

~~Known~~

Contractual ~~Obligations~~

~~In addition~~Obligations:

Among the Company’s contractual obligations as of September 30, 2022 were the following (reflected along with the Note to the ~~obligations related to the revolving credit facility noted above and detailed in Note 5,~~

~~“Bank Credit Arrangements”~~

~~of the accompanying~~ Consolidated Financial Statements in which the obligation is detailed):

(i)

operating leases (Note 9, “Leasing Arrangements”)

(ii)

the revolving credit facility (Note 10, “Bank Credit Arrangements”)

(iii)

uncertain income tax positions (Note 11, “Income Taxes”)

(iv)

contingent government grant obligations (Note 13, “Contingent Obligations and Non-Current Liabilities”)

The Company’s ~~known~~additional contractual obligations and their related due dates were as follows as of September 30, ~~2019:~~

Total

Less than 1
Year

1-3
Years

4-5
Years

More than
5 Years

Operating leases
(1)
$
6,567
$
1,528
$
3,711
$
1,145
$
183

Purchase obligations
(2)

14,995

14,203

737

55

—

Acquisition price holdback and contingent consideration
(3)

75,000

—

75,000

—

—

Uncertain income tax positions liability and interest
(4)

511

511

—

—

—

Total
$
97,073
$
16,242
$
79,448
$
1,200
$
183

~~- 31 -~~

~~Table of Contents~~

2022:


	Total		Less than 1 Year		1-3 Years		4-5 Years		More than 5 Years
Purchase obligations ⁽¹⁾	$	41,291	$	40,182	$	1,104	$	5	$	—
Acquisition price holdback ⁽²⁾		1,500		1,000		500		—		—

Total	$	42,791	$	41,182	$	1,604	$	5	$	—

(1)	~~Meridian and its subsidiaries are parties to a number of operating lease agreements around the world, the majority of which relate to office and warehouse building leases expiring at various dates.~~

~~(2)~~

Purchase obligations relate primarily to outstanding purchase orders for machinery and equipment, inventory, including instruments, service items, and research and development activities. These contractual commitments are not in excess of expected production requirements over the next twelve months.

~~(3)~~(2)

Pursuant to the purchase ~~agreement~~agreements related to the ~~June 3, 2019 acquisition~~April 30, 2022 and July 31, 2021 acquisitions of ~~the business of GenePOC,~~EUPROTEIN Inc. and BreathTek, respectively, Meridian’s ~~maximum~~ remaining consideration to be paid ~~totals $75,000. As noted below and detailed in Note 2,~~

~~“Acquisition of Business of GenePOC”~~

~~of the accompanying Consolidated Financial Statements, this amount~~ is comprised ~~of: (i) a $5,000~~solely of purchase price ~~holdback;~~holdbacks totaling $500 for EUPROTEIN Inc. and (ii) up to $70,000 of payments contingent upon the achievement of certain product development milestones and financial performance targets, the preliminary valuation of which totals approximately $27,200 as of September 30, 2019.$1,000 for BreathTek.

~~(4)~~

~~Due to inherent uncertainties in the timing of settlement of tax positions, we are unable to estimate the timing of the effective settlement of these obligations.~~

Other Commitments and Off-Balance Sheet Arrangements

License Agreements

Meridian has entered into various license agreements that require payment of royalties based on a specified percentage of sales of related ~~products. Approximately 84%~~products, with such percentages generally ranging from approximately 3% to 10%. During fiscal 2022, royalty expense totaled approximately $2,300, with 40% and 60% of ~~our royalty expenses relate~~such expense relating to our Diagnostics ~~operating segment, where the~~and Life Science segments, respectively. This compares to a total of approximately $5,200 of royalty ~~rates range from 3%~~expense in fiscal 2021, with 25% and 75% relating to ~~8%.~~our Diagnostics and Life Science segments, respectively. Meridian expects that payments under these agreements will amount to approximately ~~$2,100~~$700 in fiscal ~~2020.~~

~~Contingent Consideration for Acquisition of Business of GenePOC~~

~~Details~~2023, with the decrease from fiscal 2022 largely resulting from the last of the ~~purchase price holdback and contingent consideration due to be paid pursuant~~licensed patents applicable to the ~~purchase agreement~~Alethia product line having expired during fiscal 2022.

Off-Balance Sheet Arrangements

We utilize foreign currency exchange forward contracts to limit exposure to volatility in foreign currency gains and losses related to financial assets denominated in other than the ~~June~~holding subsidiary’s functional currency. These contracts are generally settled within a 30-day time frame and are not formally designated or accounted for as accounting hedges. We also utilize interest rate swap agreements to limit exposure to volatility in the LIBOR interest rate in connection with the revolving credit facility. The interest rate swap agreements are designated and accounted for as accounting hedges (see Note 3, ~~2019 acquisition~~“Fair Value Measurements” of the ~~business of GenePOC are set forth in Note 2,~~

~~“Acquisition of Business of GenePOC”~~

~~of the accompanying~~ Consolidated Financial ~~Statements.~~

~~Off-Balance~~

~~Sheet Arrangements~~

WeStatements). Aside from these instruments, we do not utilize special-purpose financing vehicles or have any material undisclosed

off-balance

sheet arrangements.

- 38 -

Market Risk ~~Exposure~~

Exposure:

Foreign Currency Risk

We have market risk exposure related to foreign currency transactions from our operations outside the ~~United States,~~U.S., as well as certain suppliers to our domestic businesses located outside the ~~United States.~~U.S. The foreign currencies where we have market risk exposure are the Australian dollar, British pound, Canadian dollar, Chinese yuan, Euro, and ~~Euro.~~New Israeli shekel. Assessing foreign currency exposures is a component of our overall ongoing risk management process, with such currency risks managed as we deem appropriate.

Concentration of Customers/Products Risk

Our Diagnostics segment’s net revenues from sales ~~through two U.S. distributors~~to three customers were ~~26%~~29% and 33% of the Diagnostics segment’s total ~~revenues or 18% of consolidated~~net revenues for fiscal ~~2019.~~2022 and 2021, respectively, or 13% of consolidated net revenues in each fiscal year. Additionally, our three major Diagnostics segment product families – gastrointestinal, respiratory illnesses and blood chemistry – accounted for ~~84%~~82% and 80% of our Diagnostics segment’s ~~third-party~~net revenues during fiscal ~~2019,~~2022 and ~~57%~~2021, respectively, or 39% and 32% of ~~our fiscal 2019~~each year’s consolidated net revenues.

Our Life Science segment’s net revenues from sales ~~of purified antigens and reagents~~ to ~~two~~three diagnostics manufacturing customers were ~~24%~~31% and 20% of the Life Science segment’s total net revenues for fiscal ~~2019,~~2022 and 8%2021, respectively, or 17% and 12% of ~~our~~consolidated net revenues in each fiscal ~~2019 consolidated revenues.~~

~~- 32 -~~

~~Table of Contents~~

year.

Critical Accounting ~~Policies~~

Policies:

The ~~consolidated financial statements~~Consolidated Financial Statements included in this ~~Annual Report on~~ Form

10-K

have been prepared in accordance with ~~accounting principles~~U.S. generally accepted ~~in the United States.~~accounting principles. Such accounting principles require management to make judgments about estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Listed below are the accounting policies management believes to be critical to understanding the ~~accompanying~~ Consolidated Financial Statements, along with reference to location of the policy discussion within the ~~accompanying financial statements.~~Consolidated Financial Statements. The listed policies are considered critical due to the fact that application of such polices requires the use of significant estimates and assumptions, and the carrying values of related assets and liabilities are material.


Accounting Policy	Location Within Consolidated Financial Statements
~~Accounting Policy~~	~~Location~~ Within Consolidated Financial Statements	Examples of Key Estimate Assumptions
~~Inventories~~ DOJ LeadCare Legal Matter	Note ~~1(f)~~ 5	~~Slow-moving, excess & obsolete inventories~~ Estimate of loss contingency

Revenue Recognition	Note 1(i)
~~Intangible Assets~~	~~Note 1(h)~~	~~Triggering events and impairment conditions~~

~~Revenue Recognition~~	~~Note 1(i)~~	Distributor price adjustments and fee accruals

Income Taxes
~~Fair Value Measurements~~	~~Note 1(j)~~	~~Valuation of contingent consideration~~

~~Income Taxes~~	Note 1(l) and Note 6 11	Uncertain ~~tax~~ positions and state apportionment factors

Recent Accounting ~~Pronouncements~~

Pronouncements:

A description of accounting pronouncements recently adopted by the Company, as well as accounting pronouncements issued but not yet adopted by the Company, are set forth in Note ~~1(q)~~1(s), “Summary of Significant Accounting Policies- Recent Accounting Pronouncements” of the ~~accompanying~~ Consolidated Financial Statements.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See Capital Resources and Market Risk Exposure ~~and Capital Resources under~~above within Item 7, ~~above~~ beginning on page ~~24.~~37.

- 39 -

~~- 33 -~~

~~Table of Contents~~

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements


Management’s Report on Internal Control over Financial Reporting			35 41

Reports of Independent Registered Public Accounting ~~Firm~~Firms (PCAOB ID #42 for the years ended September 30, 2022 and 2021) (PCAOB ID #248 for the year ended September 30, 2020)			36 42

Consolidated Statements of Operations for the years ended September 30, ~~2019, 2018~~2022, 2021 and ~~2017~~2020			41 46

Consolidated Statements of Comprehensive Income for the years ended September 30, ~~2019, 2018~~2022, 2021 and ~~2017~~2020			42 47

Consolidated Statements of Cash Flows for the years ended September 30, ~~2019, 2018~~2022, 2021 and ~~2017~~2020			43 48

Consolidated Balance Sheets as of September 30, ~~2019~~2022 and ~~2018~~2021			44 49

Consolidated Statements of Shareholders’ Equity for the years ended September 30, ~~2019, 2018~~2022, 2021 and ~~2017~~2020			46 51

Notes to Consolidated Financial Statements			47 52

Schedule No. II – Valuation and Qualifying Accounts for the years ended September 30, ~~2019, 2018~~2022, 2021 and ~~2017~~2020			74 79

All other supplemental schedules are omitted due to the absence of conditions under which they are required or because the information is shown in the Consolidated Financial Statements or Notes thereto.

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Table of Contents

~~Management’s Report on Internal Control over Financial Reporting~~MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule

13a-15(f).

The Company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting can only provide reasonable assurance and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, ~~2019,~~2022, based on the framework and criteria in the 2013

Internal Control – Integrated Framework,

issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on management’s evaluation and those criteria, the Company concluded that its system of internal control over financial reporting was effective as of September 30, 2019. The Company’s assessment of and conclusion on the effectiveness of its internal control over financial reporting did not include the internal controls of Meridian Bioscience Canada, Inc. (“GenePOC”), which was acquired during fiscal 2019 and the results of which since the date of acquisition were included in the 2019 consolidated financial statements. GenePOC constituted $9,250 or 2.84% of the Company’s total assets as of September 30, 2019, and $75 or 0.04% of total net revenues, for the year ended September 30, 2019.2022.

The Company’s independent registered public accounting firm has issued an attestation report on the registrant’s internal control over financial reporting.


/s/ Jack Kenny				/s/ ~~Bryan T. Baldasare~~Andrew S. Kitzmiller
Jack Kenny				~~Bryan T. Baldasare~~ Andrew S. Kitzmiller
Chief Executive Officer				Executive Vice President and
November ~~26, 2019~~ 22, 2022				Chief Financial Officer
				November ~~26, 2019~~ 22, 2022

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Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors ~~and Shareholders~~

of Meridian Bioscience, Inc.

Opinion on the ~~financial statements~~Financial Statements

We have audited the accompanying consolidated balance sheets of Meridian Bioscience, Inc. ~~(an Ohio corporation) and subsidiaries~~ (the ~~“Company”)~~Company) as of September 30, ~~2019~~2022 and ~~2018,~~2021, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for ~~each of the three~~ years ~~in the period~~then ended, ~~September 30, 2019,~~ and the related notes and consolidated financial statement schedule listed in the ~~index appearing under Schedule No. II~~Index to Annual Report on Form 10-K at Item 15 (collectively referred to as the ~~“financial~~“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company ~~as of~~at September 30, ~~2019~~2022 and ~~2018,~~2021, and the results of its operations and its cash flows for ~~each of~~ the ~~three~~ years ~~in the period~~then ended, ~~September 30, 2019,~~ in conformity with ~~accounting principles~~U.S. generally accepted ~~in the United States of America.~~accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ~~(“PCAOB”)~~(PCAOB), the Company’s internal control over financial reporting as of September 30, ~~2019,~~2022, based on criteria established in ~~the 2013~~

Internal ~~Control—Integrated~~Control-Integrated Framework

issued by the Committee of Sponsoring Organizations of the Treadway Commission ~~(“COSO”),~~(2013 framework) and our report dated November ~~26, 2019~~22, 2022, expressed an unqualified ~~opinion.~~opinion thereon.

Basis for ~~opinion~~Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our ~~audits~~audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our ~~audits~~audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence ~~supporting~~regarding the amounts and disclosures in the financial statements. Our ~~audits~~audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our ~~audits provide~~audit provides a reasonable basis for our opinion.

Critical ~~audit matters~~Audit Matter

The critical audit ~~matters~~matter communicated below ~~are matters~~is a matter arising from the current period audit of the consolidated financial statements that ~~were~~was communicated or required to be communicated to the audit committee and that: (1) ~~relate~~relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit ~~matters~~matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit ~~matters~~matter below, providing a separate ~~opinions~~opinion on the critical audit ~~matters~~matter or on the ~~accounts~~account or ~~disclosures~~disclosure to which ~~they relate.~~

~~Distributor price adjustment accrual (rebate reserve)~~

As described further in Note 1(i) to the consolidated financial statements, revenue is reduced at the date of sale for product price adjustments for certain distributors under local contracts. Management estimates accruals for distributor price adjustments based on local contract terms, sales data provided by distributors, historical statistics, current trends and other factors. The balance of the accrual was $3.4 million at September 30, 2019. We identified the distributor price adjustment accrual (referred to as the rebate reserve) as a critical audit matter.

it relates.


		LeadCare legal matter

Description of the Matters		As discussed in Note 5, at September 30, 2022, the Company has accrued $10.0 million as an estimate of the cost to settle the LeadCare legal matter with the U.S. Department of Justice (“DOJ”). As background, the Company’s wholly owned subsidiary Magellan Biosciences, Inc. (Magellan) received a subpoena from the DOJ regarding its LeadCare product line. The subpoena outlined documents to be produced, and the Company is and has been cooperating with the DOJ’s investigation in this matter and discussions continue with the DOJ to explore resolution of the matter. As of September 30, 2022, the Company believes it is probable that it had incurred a loss related to the resolution of the LeadCare legal matter and has accrued for its estimate of the cost to settle the LeadCare legal matter with the DOJ.

- 3642 -

Table of Contents

The principal consideration for our determination that the rebate reserve is a critical audit matter is the high degree of auditor subjectivity necessary in evaluating certain inputs and assumptions made by management in estimating the amount of the rebate reserve. The nature of audit evidence includes unobservable inputs and assumptions used by management in the estimate, and reliance on a customized sales report by product line. The reserve has a high degree of estimation uncertainty given management’s judgments used to determine the reserve, specifically the use of key assumptions such as average selling price, purchasing trends of distributors and historical product sales and product volume data used to predict future sales and volume levels.

~~Our audit procedures related to the rebate reserve included the following, among others.~~

We tested the design and operating effectiveness of controls relating to management’s calculation and review of the reserve which included verifying the completeness of the input data, mathematical accuracy of the calculation and evaluating the reasonableness of key assumptions used in the calculation.

We tested the reserve calculation prepared by management by performing specific procedures on the key inputs and assumptions such as the monthly sales volume, validity of distributor agreements and applied reserve percentage. The procedures performed are as follows:

We tested the completeness and accuracy of the historical sales (including average selling price) and volume report used in the calculation of the reserve by agreeing total sales to accounting records and tracing a sample of individual sales to supporting audit evidence, such as purchase orders, shipping documents and invoices.

We evaluated the existence and validity of distributor agreements by obtaining a sample of issued credit memos and executed distributor agreements to test compliance with the stated terms in the corresponding agreements.

~~We analyzed year over year trends in the reserve in comparison with revenue trends to further evaluate reasonableness of the estimate and consistency with expectations.~~

~~Valuation of intangible assets and contingent consideration~~

As described in Note 2 to the consolidated financial statements, the Company completed an acquisition which resulted in goodwill of $35.1 million, intangible assets of $40.4 million, and contingent consideration of $27.2 million. The determination of the fair value of the intangible assets acquired and contingent consideration required management, with the help of a third-party valuation specialist, to make significant estimates and assumptions including the assumed sales growth rate, margin percentages, economic life and discount rate. We identified the valuation of intangible assets and contingent consideration as a critical audit


		Auditing management’s accounting for and disclosure of the estimated loss contingency from the LeadCare legal matter is especially challenging as evaluating the probability and amount of loss is subjective and requires judgment due in part to the uncertain nature of when the LeadCare legal matter will be resolved or the outcome of the investigation, and the ultimate resolution of the LeadCare legal matter. The principal consideration for our determination that the valuation of intangible assets and contingent consideration associated with the acquisition is a critical audit matter is the subjective auditor judgment required in evaluating the inputs and assumptions used by management in determining fair value. The valuation of the intangible assets and contingent consideration are subject to higher estimation uncertainty due to management judgments in determining key assumptions that include the assumed sales growth rate, margin percentages, economic life and discount rate. Changes in these significant assumptions could have a significant impact on the fair value of the intangible assets and contingent consideration. ~~Our audit procedures related to the valuation of intangible assets and contingent consideration included the following, among others.~~ We tested the design and operating effectiveness of controls relating to the valuation report and allocation of purchase price which included management’s review of the valuation report for the completeness and mathematical accuracy of the data, and evaluating the reasonableness of assumptions used in the calculation such as economic life and discount rate. We utilized a valuation specialist to assist in evaluating the appropriateness of the Company’s valuation models developed for acquired assets and evaluating the reasonableness of significant assumptions used including the assumed sales growth rate, margin percentages, economic life and discount rate as compared to industry/market data. ~~- 37 -~~ ~~Table of Contents~~ We evaluated whether the assumptions used were reasonable by considering past performance of similar technological assets, industry data, current market forecasts, and whether such assumptions were consistent with evidence obtained in other areas of the audit.
How We Addressed the Matter in Our Audit		We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the identification, evaluation and disclosure of loss contingencies, including the Company’s assessment and measurement of the estimate of the probable cost and liability. To test the assessment of the probability of incurrence of a loss and the estimated loss, to the extent it was reasonably estimable, we performed audit procedures that included, among others, reviewing related correspondence with external legal counsel and the DOJ, reviewing legal counsel confirmation letters, assessing scope and cost estimates the Company used in determination for its estimate of the cost to settle the LeadCare legal matter, and searching for other available information that might indicate new or contrary facts related to the matter.

/s/ ~~GRANT THORNTON~~Ernst & Young LLP

We have served as the Company’s auditor since ~~2005.~~2020.

Cincinnati, Ohio

November ~~26, 2019~~22, 2022

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Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Meridian Bioscience, Inc.

Opinion on ~~internal control over~~the financial ~~reporting~~statements

We have audited the ~~internal control over financial reporting~~consolidated balance sheet of Meridian Bioscience, Inc. (an Ohio corporation) and subsidiaries (the “Company”) as of September 30, ~~2019,~~2020 (not presented herein), and the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for the year then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2020, and the results of its operations and its cash flows for the year ended September 30, 2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We served as the Company’s auditor from 2005 to 2020.

Cincinnati, Ohio

November 23, 2020

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Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Meridian Bioscience, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Meridian Bioscience, Inc.’s (the Company) internal control over financial reporting as of September 30, 2022, based on criteria established in ~~the 2013~~

Internal Control—Integrated Framework

issued by the Committee of Sponsoring Organizations of the Treadway Commission ~~(“COSO”)~~(2013 framework) (the COSO criteria). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, ~~2019,~~2022, based on ~~criteria established in~~ the ~~2013~~

~~Internal Control—Integrated Framework~~COSO criteria.

~~issued by COSO.~~

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ~~(“PCAOB”)~~(PCAOB), the consolidated ~~financial statements~~balance sheets of the Company as of ~~and for the year ended~~ September 30, ~~2019,~~2022 and 2021, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for years then ended, and the related notes and consolidated financial statement schedule listed in the Index to Annual Report on Form 10-K at Item 15 and our report dated November ~~26, 2019~~22, 2022, expressed an unqualified opinion ~~on those financial statements.~~thereon.

Basis for ~~opinion~~Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting (“Management’s Report”). Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting of Meridian Bioscience Canada, Inc. (“GenePOC”), a wholly-owned subsidiary, whose financial statements reflect total assets and revenues constituting 2.84 and 0.04 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended September 30, 2019. As indicated in Management’s Report, GenePOC was acquired during fiscal 2019. Management’s assertion on the effectiveness of the Company’s internal control over financial reporting excluded internal control over financial reporting of GenePOC.

Definition and ~~limitations~~Limitations of ~~internal control over financial reporting~~Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

~~- 39 -~~

~~Table of Contents~~

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ ~~GRANT THORNTON~~Ernst & Young LLP

Cincinnati, Ohio

November ~~26, 2019~~22, 2022

- 4045 -

Table of Contents

CONSOLIDATED STATEMENTS OF OPERATIONS (in ~~thousands, except per share data)~~

~~Meridian Bioscience, Inc. and Subsidiaries~~

For the Year Ended September 30,

2019

2018

2017

Net Revenues

$
201,014
$
213,571
$
200,771

Cost of Sales

82,689

82,874

76,479

Gross Profit

118,325

130,697

124,292

Operating Expenses:

Research and development

17,948

16,789

16,036

Selling and marketing

28,446

34,468

32,388

General and administrative

33,002

34,805

31,096

Acquisition-related costs

1,808

—

—

Restructuring costs

2,839

8,706

134

Selected legal
costs

1,583

4,345

628

Goodwill impairment charge

—

—

6,628

Total operating expenses

85,626

99,113

86,910

Operating Income

32,699

31,584

37,382

Other Income (Expense):

Interest income

681

418

171

Interest expense

(1,945
)
(1,520
)
(1,642
)
Other, net

122

(102
)
518

Total other expense

(1,142
)
(1,204
)
(953
)

Earnings Before Income Taxes

31,557

30,380

36,429

Income Tax Provision

7,175

6,531

14,872

Net Earnings

$
24,382
$
23,849
$
21,557

Earnings Per Share Data:

Basic earnings per common share

$
0.57
$
0.56
$
0.51

Diluted earnings per common share

$
0.57
$
0.56
$
0.51

Common shares used for basic earnings per common share

42,571

42,325

42,188

Effect of dilutive stock options and restricted share units

328

429

383

Common shares used for diluted earnings per common share

42,899

42,754

42,571

Dividends declared per common share

$
0.250
$
0.500
$
0.575

Anti-dilutive Securities:

Common share options and restricted share units

1,129

1,007

873

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (dollar amounts in thousands)~~

~~Meridian Bioscience, Inc. and Subsidiaries~~

For the Year Ended September 30,

2019

2018

2017

Net Earnings

$
24,382
$
23,849
$
21,557

Other comprehensive income (loss):

Foreign currency translation adjustment

(802
)
(1,075
)
1,616

Unrealized gain (loss) on cash flow hedge

(1,159
)
907

1,544

Amortization of gain on cash flow hedge

(102
) — —
Income taxes related to items of other comprehensive income

465

(263
)
(590
)

Other comprehensive income (loss), net of tax

(1,598
)
(431
)
2,570

Comprehensive Income

$
22,784
$
23,418
$
24,127

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS (dollar amounts in thousands)~~

~~Meridian Bioscience, Inc. and Subsidiaries~~

For the Year Ended September 30,

2019

2018

2017

Cash Flows From Operating Activities

Net earnings
$
24,382
$
23,849
$
21,557

Non-cash
items included in net earnings:

Depreciation of property, plant and equipment

5,433

4,491

4,342

Amortization of intangible assets

4,531

3,433

3,776

Amortization of deferred instrument costs

—

764

972

Stock-based compensation

3,251

3,402

3,381

Goodwill impairment charge

—

—

6,628

Deferred income taxes

(817
)
(300
)
1,474

Losses on
dispositions of
long-lived assets

632

—

—

Change in the following, net of acquisition:

Accounts receivable

(2,314
)
(4,447
)
(1,211
)
Inventories

3,841

(1,142
)
3,467

Prepaid expenses and other current assets

(2,044
)
323

1,225

Accounts payable and accrued expenses

(2,315
)
4,124

(3,151
)
Income taxes payable

1,793

(524
)
(384
)
Other, net

(542
)
810

(721
)

Net cash provided by operating activities

35,831

34,783

41,355

Cash Flows From Investing Activities

Purchase of property, plant and equipment

(3,797
)
(4,201
)
(4,467
)
Disposal
s
of property, plant and equipment

669

—

—

Acquisition of GenePOC business

(45,324
)
—

—

Net cash used for investing activities

(48,452
)
(4,201
)
(4,467
)

Cash Flows From Financing Activities

Dividends paid

(10,612
)
(21,170
)
(24,266
)
Proceeds from revolving credit facility

75,824

—

—

Payment of debt issuance costs

(489
)
—

—

Payments on term loan

(50,250
)
(4,500
)
(3,750
)
Proceeds and tax benefits from exercises of stock options

787

187

303

Payment of acquisition consideration

—

(2,110
)
—

Net cash provided by (used for) financing activities

15,260

(27,593
)
(27,713
)

Effect of Exchange Rate Changes on Cash and Equivalents and Restricted Cash

(1,005
)
(298
)
671

Net Increase in Cash and Equivalents and Restricted Cash

1,634

2,691

9,846

Cash and Equivalents and Restricted Cash at Beginning of Period

60,763

58,072

48,226

Cash and Equivalents and Restricted Cash at End of Period
$
62,397
$
60,763
$
58,072

Cash and Equivalents
$
62,397
$
59,763
$
57,072

Restricted Cash

—

1,000

1,000

Cash and Equivalents and Restricted Cash at End of Period
$
62,397
$
60,763
$
58,072

~~Supplemental Cash Flow Information:~~

~~See Notes 1(g), 2, 5 and 6.~~

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~CONSOLIDATED BALANCE SHEETS (dollar amounts in thousands)~~

~~Meridian Bioscience, Inc. and Subsidiaries~~

As of September 30,

2019

2018

Assets

Current Assets:

Cash and equivalents

$
62,397
$
59,763

Accounts receivable, less allowances of $537 and $310, respectively

35,608

32,336

Inventories

39,617

41,993

Prepaid expenses and other current assets

7,139

4,961

Total current assets

144,761

139,053

Property, Plant and Equipment, at Cost:

Land

982

1,160

Buildings and improvements

31,904

32,444

Machinery, equipment and furniture

64,155

50,606

Construction in progress

522

1,631

Subtotal

97,563

85,841

Less: accumulated depreciation and amortization

66,996

55,846

Net property, plant and equipment

30,567

29,995

Other Assets:

Goodwill

89,241

54,637

Other intangible assets, net

60,243

23,113

Restricted cash

—

1,000

Deferred instrument costs, net

—

1,239

Fair value of interest rate swap

—

1,722

Deferred income taxes

156

130

Other assets

510

488

Total other assets

150,150

82,329

Total assets

$

325,478

$

251,377

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~- 4~~

~~Table of Contents~~

~~CONSOLIDATED BALANCE SHEETS (dollar amounts in thousands)~~

~~Meridian Bioscience, Inc. and Subsidiaries~~

As of September 30,

2019

2018

Liabilities and Shareholders’ Equity

Current Liabilities:

Accounts payable

$
7,238
$
6,260

Accrued employee compensation costs

7,938

9,195

Other accrued expenses

3,758

3,133

Current portion of long-term debt

—

5,250

Income taxes payable

1,980

335

Total current liabilities

20,914

24,173

Non-Current Liabilities:

Acquisition consideration

32,202

—

Post-employment benefits

2,500

2,646

Long-term debt

75,824

44,930

Long-term income taxes payable

549

441

Deferred income taxes

2,522

3,769

Total
non-current
liabilities

113,597

51,786

Commitments and Contingencies

Shareholders’ Equity:

Preferred stock, no par value; 1,000,000 shares authorized; NaN issued

—

—

Common shares, no par value; 71,000,000 shares authorized, 42,712,296 and 42,399,962 issued, respectively

—

—

Additional
paid-in
capital

132,834

129,193

Retained earnings

63,108

49,602

Accumulated other comprehensive loss

(4,975
)
(3,377
)

Total shareholders’ equity

190,967

175,418

Total liabilities and shareholders’ equity

$

325,478

$

251,377

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (dollar and share amounts in~~ thousands, except per share data)

Meridian Bioscience, Inc. and Subsidiaries

Common
Shares
Issued

Additional
Paid-in

Capital

Retained
Earnings

Accum

Other
Comp
Income
(Loss)

Total

B
alance at September 30, 2016

42,107
$
122,356
$
49,632
$
(5,516
) $
166,472

Cash dividends paid - $0.575 per share

—

—

(24,266
)
—

(24,266
)
Conversion of restricted share units
and exercise of stock options

100

(129
)
—

—

(129
)
Stock compensation expense

—

3,381

—

—

3,381

Net earnings

—

—

21,557

—

21,557

Foreign currency translation adjustment
— — —
1,616

1,616

Hedging activity, net of tax

—

—

—

954

954

Balance at September 30, 2017

42,207

125,608

46,923

(2,946
)
169,585

Cash dividends paid - $0.500 per share

—

—

(21,170
)
—

(21,170
)
Conversion of restricted share units
and ex
ercise of stock options

193

183

—

—

183

Stock compensation expense

—

3,402

—

—

3,402

Net earnings

—

—

23,849

—

23,849

Foreign currency translation adjustment
— — —
(1,075
)
(1,075
)
Hedging activity, net of tax

—

—

—

644

644

Balance at September 30, 2018

42,400

129,193

49,602

(3,377
)
175,418

Cash dividends paid - $0.250 per share

—

—

(10,612
)
—

(10,612
)
Conversion of restricted share units and exercise of stock options

312

390

—

—

390

Stock compensation expense

—

3,251

—

—

3,251

Net earnings

—

—

24,382

—

24,382

Foreign currency translation adjustment
— — —
(802
)
(802
)
Hedging activity, net of tax

—

—

—

(944
)
(944
)
Adoption of ASU
2014-09

—

—

(116
)
—

(116
)
Adoption of ASU
2018-02

—

—

(148
)
148

—

��
Balance at September 30, 2019

42,712
$

132,834
$
63,108
$
(4,975
) $

190,967


For the Year Ended September 30,	2022			2021			2020
Net Revenues	$	333,018		$	317,896		$	253,667
Cost of Sales		144,662			116,748			97,419

Gross Profit		188,356			201,148			156,248

Operating Expenses:
Research and development		24,335			23,911			23,729
Selling and marketing		31,273			26,780			26,486
General and administrative		57,148			49,541			44,345
Product recall costs (adjustment)		(350	)		5,596			—
Acquisition and transaction related costs		6,940			392			3,890
Litigation and select legal costs		13,510			2,803			2,080
Restructuring costs		1,109			—			687
Change in fair value of acquisition consideration and settlement		—			(909	)		(6,293	)

Total Operating Expenses		133,965			108,114			94,924

Operating Income		54,391			93,034			61,324
Other Income (Expense):
Interest income		17			—			142
Interest expense		(1,189	)		(1,878	)		(2,632	)
RADx grant income		—			1,000			—
Other, net		1,098			(1,705	)��		459

Total Other Expense, Net		(74	)		(2,583	)		(2,031	)

Earnings Before Income Taxes		54,317			90,451			59,293

Income Tax Provision		11,858			19,044			13,107

Net Earnings	$	42,459		$	71,407		$	46,186

Earnings Per Share Data:
Basic earnings per common share	$	0.97		$	1.65		$	1.08
Diluted earnings per common share	$	0.96		$	1.62		$	1.07

Common shares used for basic earnings per common share		43,583			43,259			42,855
Effect of dilutive stock options and restricted share units		792			753			319

Common shares used for diluted earnings per common share		44,375			44,012			43,174

Anti-Dilutive Securities:
Common share options and restricted share units		154			203			893

The accompanying notes are an integral part of these ~~consolidated financial statements.~~Consolidated Financial Statements.

646

Table of Contents

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands)

Meridian Bioscience, Inc. and Subsidiaries


For the Year Ended September 30,	2022			2021			2020
Net Earnings	$	42,459		$	71,407		$	46,186
Other Comprehensive Income (Loss):
Foreign currency translation adjustment		(11,929	)		1,780			3,884
Recognition of gains on cash flow hedges		(935	)		(154	)		(308	)
Unrealized gain (loss) on cash flow hedge		2,560			510			(713	)
Income taxes related to items of other comprehensive income (loss)		(398	)		(78	)		252

Other Comprehensive Income (Loss), Net of Tax		(10,702	)		2,058			3,115

Comprehensive Income	$	31,757		$	73,465		$	49,301

The accompanying notes are an integral part of these Consolidated Financial Statements.

- 4

Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

Meridian Bioscience, Inc. and Subsidiaries


For the Year Ended September 30,	2022			2021			2020
Cash Flows From Operating Activities
Net earnings	$	42,459		$	71,407		$	46,186
Non-cash items included in net earnings:
Depreciation of property, plant and equipment		6,599			6,510			5,823
Amortization of intangible assets		9,912			8,776			7,744
Stock compensation expense		6,900			4,156			3,802
Deferred income taxes		(1,101	)		(3,835	)		760
Estimated litigation costs		10,000			—			—
Change in fair value of acquisition consideration and settlement		—			(909	)		(6,293	)
Change in the following, net of acquisitions:
Accounts receivable		4,564			(12,766	)		(971	)
Inventories		5,223			(7,800	)		(18,977	)
Prepaid expenses and other current assets		(1,553	)		(3,711	)		(153	)
Accounts payable and accrued expenses		1,038			6,346			7,248
Income taxes payable		565			(329	)		1,435
Other, net		(2,245	)		(980	)		1,372

Net cash provided by operating activities		82,361			66,865			47,976

Cash Flows From Investing Activities
Purchase of property, plant and equipment		(8,615	)		(18,312	)		(3,299	)
RADx grant proceeds offsetting cost of equipment		1,250			1,500			—
Acquisitions, net of cash acquired and holdback		(3,750	)		(18,585	)		(51,299	)
Payment of acquisition consideration holdback		—			(5,000	)		—
								��
Net cash used in investing activities		(11,115	)		(40,397	)		(54,598	)

Cash Flows From Financing Activities
Payment on revolving credit facility		(35,000	)		(18,824	)		(57,000	)
Proceeds from revolving credit facility		—			10,000			50,000
Payment of acquisition consideration		—			(20,000	)		—
Payment on government grant obligations		—			(5,297	)		—
Payment of debt issuance costs		(404	)		—			(116	)
Proceeds from exercise of stock options		2,450			3,052			3,559
Employee taxes paid upon stock option exercises and net share settlement of restricted share units		(1,349	)		—			—

Net cash used in financing activities		(34,303	)		(31,069	)		(3,557	)

Effect of Exchange Rate Changes on Cash and Cash Equivalents		(5,261	)		858			1,296

Net Increase (Decrease) in Cash and Cash Equivalents		31,682			(3,743	)		(8,883	)

Cash and Cash Equivalents at Beginning of Period		49,771			53,514			62,397

Cash and Cash Equivalents at End of Period	$	81,453		$	49,771		$	53,514

Supplemental Consolidated Cash Flow Information:

See Notes 1(g), 3, 9, 10 and 11.

The accompanying notes are an integral part of these Consolidated Financial Statements.

Table of Contents

CONSOLIDATED BALANCE SHEETS (in thousands)

Meridian Bioscience, Inc. and Subsidiaries


As of September 30,	2022		2021
Assets
Current Assets:
Cash and cash equivalents	$	81,453	$	49,771
Accounts receivable, less allowances of $1,325 and $1,078, respectively		47,235		53,568
Inventories, net		67,814		76,842
Prepaid expenses and other current assets		14,095		12,626

Total Current Assets		210,597		192,807

Property, Plant and Equipment:
Land		968		989
Buildings and improvements		32,983		32,765
Machinery, equipment and furniture		79,517		78,410
Construction in progress		10,589		9,991

Subtotal		124,057		122,155
Less: accumulated depreciation and amortization		79,199		78,941

Net Property, Plant and Equipment		44,858		43,214

Other Assets:
Goodwill		116,302		114,668
Other intangible assets, net		74,131		84,151
Right-of-use assets, net		5,850		5,786
Deferred income taxes		9,278		8,731
Other assets		2,081		365

Total Other Assets		207,642		213,701

Total Assets	$	463,097	$	449,722

The accompanying notes are an integral part of these Consolidated Financial Statements.

Table of Contents

CONSOLIDATED BALANCE SHEETS (in thousands)

Meridian Bioscience, Inc. and Subsidiaries


As of September 30,	2022			2021
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable	$	17,759		$	11,701
Accrued employee compensation costs		17,682			16,853
Accrued estimated litigation costs		10,000			—
Accrued product recall costs		1,157			5,100
Current operating lease obligations		1,830			1,990
Current government grant obligations		667			638
Other accrued expenses		5,048			7,027
Income taxes payable		3,808			3,848

Total Current Liabilities		57,951			47,157

Non-Current Liabilities:
Post-employment benefits		1,673			2,253
Long-term operating lease obligations		4,127			3,932
Long-term debt		25,000			60,000
Government grant obligations		4,620			5,176
Long-term income taxes payable		395			469
Deferred income taxes		578			1,055
Other non-current liabilities		692			1,378

Total Non-Current Liabilities		37,085			74,263

Commitments and Contingencies

Shareholders’ Equity:
Preferred stock, no par value; 1,000,000 shares authorized; none issued		—			—
Common shares, no par value; 71,000,000 shares authorized, 43,755,188 and 43,361,898 issued, respectively		—			—
Additional paid-in capital		155,664			147,403
Treasury stock, at cost, 9,655 shares		(259	)		—
Retained earnings		223,160			180,701
Accumulated other comprehensive income (loss)		(10,504	)		198

Total Shareholders’ Equity		368,061			328,302

Total Liabilities and Shareholders’ Equity	$	463,097		$	449,722

The accompanying notes are an integral part of these Consolidated Financial Statements.

Table of Contents

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (in thousands, except per share data)

Meridian Bioscience, Inc. and Subsidiaries


	Common Shares		Additional Paid-In Capital		Treasury Stock						Retained Earnings		Accumulated Other Comp. Income (Loss)			Total Shareholders’ Equity
	Common Shares		Additional Paid-In Capital		Sh.			Amt.			Retained Earnings		Accumulated Other Comp. Income (Loss)			Total Shareholders’ Equity
Balance at September 30, 2019		42,712	$	132,834		—		$	—		$	63,108	$	(4,975	)	$	190,967

Conversion of restricted share units and exercise of stock options		357		3,559		—			—			—		—			3,559
Stock compensation expense		—		3,802		—			—			—		—			3,802
Net earnings		—		—		—			—			46,186		—			46,186
Foreign currency translation adjustment		—		—		—			—			—		3,884			3,884
Hedging activity, net of tax		—		—		—			—			—		(769	)		(769	)

Balance at September 30, 2020		43,069	$	140,195		—		$	—		$	109,294	$	(1,860	)	$	247,629

Conversion of restricted share units and exercise of stock options		293		3,052		—			—			—		—			3,052
Stock compensation expense		—		4,156		—			—			—		—			4,156
Net earnings		—		—		—			—			71,407		—			71,407
Foreign currency translation adjustment		—		—		—			—			—		1,780			1,780
Hedging activity, net of tax		—		—		—			—			—		278			278

Balance at September 30, 2021		43,362	$	147,403		—		$	—		$	180,701	$	198		$	328,302

Conversion of restricted share units and exercise of stock options		393		1,361		(10	)		(259	)		—		—			1,102
Stock compensation expense		—		6,900		—			—			—		—			6,900
Net earnings		—		—		—			—			42,459		—			42,459
Foreign currency translation adjustment		—		—		—			—			—		(11,929	)		(11,929	)
Hedging activity, net of tax		—		—		—			—			—		1,227			1,227

Balance at September 30, 2022		43,755	$	155,664		(10	)	$	(259	)	$	223,160	$	(10,504	)	$	368,061

The accompanying notes are an integral part of these Consolidated Financial Statements.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Meridian Bioscience, Inc. and Subsidiaries

(~~dollar and share amounts~~ in thousands, except per share data)

(1)	Summary of Significant Accounting Policies

(a)

~~Nature of~~ Business Description

Meridian is a fully-integrated life science company whose principal businesses are: (i) the development, manufacture, sale and distribution of ~~clinical~~ diagnostic ~~test~~testing systems and kits, primarily for certain gastrointestinal and respiratory infectious diseases, and elevated blood lead levels; and (ii) the manufacture and distribution of bulk antigens, antibodies, ~~PCR/qPCR~~immunoassay blocking reagents, specialized Polymerase Chain Reaction (“PCR”) master mixes, isothermal mixes, enzymes, nucleotides, and bioresearch reagents used by other diagnostic manufacturers and ~~researchers~~

researchers.

Our reportable segments are Diagnostics and Life Science. The Diagnostics segment consists of: (i) manufacturing operations for infectious disease products in Cincinnati, Ohio; Quebec City, Canada; and Modi’in, Israel; (ii) manufacturing operations for blood chemistry products in Billerica, Massachusetts (near Boston); and (iii) the sale and distribution of diagnostics products domestically and abroad. This segment’s products are used by hospitals, reference labs and physician offices to detect infectious diseases and elevated lead levels in blood.

The Life Science segment consists of: (i) manufacturing operations in Memphis, Tennessee; Boca Raton, Florida; London, England; and Luckenwalde, Germany; and (ii) the sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, isothermal reagents, nucleotides, and bioresearch reagents domestically and abroad, including a sales and business development facility, with outsourced distribution capabilities, in Beijing, China. This segment’s products are used by manufacturers and researchers in a variety of applications (e.g., in vitro medical device manufacturing, microRNA detection, next-generation sequencing, plant genotyping, and mutation detection, among others).

(b)

Principles of Consolidation and Basis of Presentation -

The ~~consolidated financial statements~~Consolidated Financial Statements include the accounts of Meridian Bioscience, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Unless the context requires otherwise, references to “Meridian,” “we,” “us,” “our” or “our company” refer to Meridian Bioscience, Inc. and its subsidiaries.

It should be noted that the terms revenue and/or revenues are utilized throughout these notes to the Consolidated Financial Statements to indicate net revenue and/or net revenues.

(c)

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the ~~financial statements,~~Consolidated Financial Statements, and the reported amounts of net revenues and expenses during the reporting period. The Company’s results are affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, supply chain disruptions, interest and monetary exchange rates, government fiscal policies, government policies surrounding the containment of the ongoing COVID-19 pandemic, and changes in prices of raw materials, can have a significant effect on the results of operations. Actual results could differ from ~~those~~the Company’s estimates.

(

)

(d)

Foreign Currency Translation

- Assets and liabilities of foreign operations are translated using

year-end

exchange rates with gains or losses resulting from translation included as a separate component of accumulated other comprehensive income ~~or loss. Revenues~~(loss). Net revenues and expenses are translated using exchange rates prevailing during the year. We also recognize foreign currency transaction gains and losses on certain assets and liabilities that are denominated in the Australian dollar, British pound, Canadian dollar, Chinese yuan, Euro, and ~~Euro~~New Israeli shekel currencies. These gains and losses are included in other ~~income and~~ expense, net in the ~~accompanying~~ Consolidated Statements of Operations.

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(e)

Cash and Cash Equivalents ~~and Investments~~

The primary objectives of our investment activities are to preserve capital and provide sufficient liquidity to meet operating requirements and fund strategic initiatives such as acquisitions. We maintain a written investment policy that governs the management of our investments in fixed income securities. This policy, among other things, provides that we may purchase only high credit-quality securities that have short-term ratings of at least

~~A-2,~~

~~P-2~~

~~and~~

~~F-2,~~

~~and long-term ratings of at least A, Baa1 and A, by Standard & Poor’s, Moody’s and Fitch, respectively, at the time of purchase.~~ We consider short-term investments with original maturities of 90 days or less to be cash equivalents, including institutional money market funds. At times our investments of cash and cash equivalents with various high credit quality financial institutions may be in excess of the Federal Deposit Insurance Corporation ~~(FDIC)~~(“FDIC”) insurance limit.

~~Our investment portfolio includes the following components:~~

September 30, 2019

September 30, 2018

Cash and
Equivalents

Other

Cash and
Equivalents

Other

Institutional money market funds
$
20,913
$
—
$
20,421
$
—

Cash on hand –

Restricted

—

—

—

1,000

Unrestricted

41,484

—

39,342

—

Total
$
62,397

$

—
$
59,763
$

1,000

~~Table of Contents~~

(f)

Inventories

- Inventories are stated at the lower of cost or ~~market.~~net realizable value. Cost is determined on a

first-in,

first-out

~~(FIFO)~~ (“FIFO”) basis. ~~Testing~~Diagnostic testing instruments are carried in inventory until they are sold outright or placed with a customer under the customer reagent rental program, at which time they are transferred to property, plant and equipment.

We establish reserves against cost for excess and obsolete materials, finished goods whose shelf life may expire before sale to customers, and other identified exposures. The Company specifically considered the impact of the ongoing COVID-19 pandemic, specifically the demand for COVID-19 related products, on its inventories at September 30, 2022 and 2021. Such reserves were ~~$2,285~~$6,132 and ~~$1,971~~$4,997 at September 30, ~~2019~~2022 and ~~2018,~~2021, respectively. We estimate these reserves based on assumptions about future demand and market conditions. If actual demand and market conditions were to be less favorable than such estimates, additional inventory write-downs would be required and recorded in the period known. ~~Such adjustments would negatively affect gross profit margin and overall results of operations~~

(g)

Property, Plant and Equipment

- Property, plant and equipment are stated at cost. Upon retirement or other disposition, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is reflected in net earnings. Maintenance and repairs are expensed as incurred. Depreciation is computed on the straight-line method in amounts sufficient to

write-off

the cost over the estimated useful lives, generally as follows:

Buildings and improvements - 18 to 40 years

Leasehold improvements - life of the lease

Machinery, equipment and furniture - 3 to 10 years

Computer equipment and software - 3 to 5 years

Instruments under customer reagent rental arrangements - 5 years

Supplemental Cash Flow Information (Non-Cash Capital Expenditures)

Additions to property, plant and equipment for which cash remained unpaid totaled $793, $416 and $236 at ~~fiscal~~September 30, 2022, 2021 and 2020, respectively.

~~year-end~~

~~totaled $~~

~~108~~

~~, $~~

~~294~~

~~and $~~

~~394~~

~~in fiscal~~

~~2019~~

~~2018~~

~~and~~

~~2017~~

~~, respectively.~~

(h)

Intangible Assets -

- Goodwill is subject to an annual impairment review (or more frequently if impairment indicators arise) at the reporting unit level, which ~~we perform annually~~is performed as of ~~June 30,~~ the end of our third fiscal quarter. A reporting unit is generally an operating segment or one level below an operating segment that constitutes a business for which discrete financial information is available and regularly reviewed by segment management. Following the fiscal 2018 restructuring and consolidation of

~~separately-run~~

businesses into two integrated global business units (see Note 3), at September 30, 2019 and September 30, 2018, we had two reporting units (Diagnostics and Life Science), both of which contained goodwill. We review our reporting unit structure annually, or more frequently if facts and circumstances warrant. Goodwill is considered impaired if the carrying valuefirst day of the ~~reporting unit exceeds its fair value. We have 0 intangible assets with indefinite lives other than goodwill.~~fourth fiscal quarter (July 1).

At both September 30, 2022 and 2021, we had two reporting units (Diagnostics and Life Science), both of which contained goodwill. We review our reporting unit structure annually, or more frequently if facts and circumstances warrant. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. We have no intangible assets with indefinite lives other than goodwill.

~~uring~~

During fiscal ~~2019 and fiscal 2018, we performed quantitative~~2022, the annual impairment review of the Company’s goodwill consisted of qualitative assessments ~~as of June 30~~ for each of our Diagnostics and Life Science reporting units. ~~As part of this~~A qualitative assessment is first performed to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value using qualitative indicators. In the event that the reporting unit does not pass the qualitative assessment, the reporting unit’s carrying value is compared to its fair value, with fair value of the reporting unit estimated using market value and discounted cash flow approaches. Both our Diagnostics and Life Science reporting units satisfied the qualitative assessments as of July 1, 2022, and no impairment was recognized.

The annual goodwill impairment assessment of the Company’s goodwill as of July 1, 2021, consisted of quantitative assessments for each of our Diagnostics and Life Science reporting units. The quantitative assessments determined ~~through a valuation performed by a third party, was calculated~~fair value via both market (comparable company) and income (discounted cash flows) approaches. Based upon these approaches, the fair value of each reporting unit exceeded its carrying value; therefore, each of the Diagnostics and Life Science reporting units satisfied the quantitative assessment ~~for each~~at July

1, 2021. The impact of ~~fiscal 2019~~the ongoing COVID-19 pandemic has had varying impacts on the Diagnostics and ~~fiscal 2018.~~

~~Similarly, during fiscal 2017, we performed quantitative assessments as of June 30, 2017 for each of our Americas Diagnostics, Bioline and~~ Life

~~Science-U.S.~~

Science reporting units, ~~that existed at that time, noting~~and specifically an adverse impact on the ~~separate Magellan discussion below. As part~~Diagnostics reporting unit. However, even in light of this assessment, fair value, as determined through a valuation performed by a third party, was calculated via both market (comparable company) and income (discounted cash flows) approaches. Based upon these approaches, the COVID-19 pandemic, the estimated fair value of ~~each~~the Diagnostics reporting unit, ~~exceeded~~as calculated at July 1, 2021, was over 50% greater than its carrying ~~value; therefore, each of the Americas Diagnostics, Bioline and Life~~

~~Science-U.S.~~

~~reporting units satisfied the quantitative assessment for fiscal 2017.~~

~~During the quarter ended June 30, 2017, the events described below occurred, indicating that impairment of the goodwill recorded as part of the Magellan acquisition had occurred.~~value.

853

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On May 17, 2017, the FDA issued a field safety notice advising customers to discontinue use of Magellan’s lead testing systems with venous blood samples. This field safety notice was followed by product recall notices on May 25

~~and June 5~~

. Subsequent to the issuances of these field safety and product recall notices, the FDA completed an inspection of Magellan’s quality system, and issued its Form 483, Inspectional Observations, on June 29, 2017, which was expectedly followed by a Warning Letter issued on October 23, 2017. The Warning Letter requires periodic reporting on our remediation progress

In light of these factors and their impacts, during the third quarter of fiscal 2017, it was determined that a potential impairment of goodwill recorded in connection with the acquisition of Magellan had occurred (i.e., a “triggering event”). With the assistance of an independent valuation firm, Magellan’s fair value was calculated via both market (comparable company) and income (discounted cash flows) approaches. Based upon these approaches, it was determined that the carrying value of the Magellan reporting unit did, in fact, exceed its fair value. As a result, an impairment charge of $6,628, on both a

~~pre-tax~~

~~and~~

~~after-tax~~

basis, was recorded during the third quarter and is reflected as a separate operating expense line item within the accompanying Consolidated Statement of Operations for the year ended September 30, 2017. This quantitative assessment as of May 31, 2017 was supplemented by a qualitative assessment of Magellan’s goodwill as of June 30, 2017, with such assessment indicating that 0 additional impairment existed.

~~During fiscal~~

~~2019, goodwill increased $34,604, reflecting the addition of $34,582~~

~~in connection with the acquisition of the GenePOC business~~

~~$599~~

~~increase~~

~~from~~

~~the~~

~~cur~~

~~ency~~

~~translation~~

~~adjustments~~

~~thereon~~

~~and a $577~~

~~decrease from currency translation adjustments on the goodwill of the Life Science reporting unit. The decrease of $289~~

~~in fiscal~~

~~2018~~

~~resulted solely from currency translation adjustments on the goodwill of the Life Science reporting unit.~~

~~A summary of Meridian’s acquired intangible assets subject to amortization, as of September 30, 2019 and 2018 is as follows.~~

2019

2018

As of September 30,

Gross
Carrying
Value

Accum.
Amort.

Gross
Carrying
Value

Accum.
Amort.

Manufacturing technologies, core products and cell lines
$

56,193
$

15,096
$

22,297
$

13,974

Tradenames, licenses and patents

14,494

6,094

8,647

5,267

Customer lists, customer relationships and supply agreements

24,274

14,110

24,461

13,051

Government grants

814

232

—

—

$

95,775
$

35,532
$
55,405
$

32,292

The actual aggregate amortization expense for these intangible assets for fiscal 2019, 2018 and 2017 was $4,531, $3,433 and $3,776, respectively. The estimated aggregate amortization expense for these intangible assets for each of the five succeeding fiscal years is as follows: fiscal 2020 - $6,684, fiscal 2021 - $5,490, fiscal 2022 - $5,113, fiscal 2023 - $5,100 and fiscal 2024 - $5,096.

Long-lived assets, excluding goodwill, are reviewed for impairment when events or circumstances indicate that such assets may not be recoverable at their carrying value. Whether an event or circumstance triggers an impairment is determined by comparing an estimate of the asset’s future undiscounted cash flows to its carrying value. If impairment has occurred, it is measured by a fair-value based calculation.

Our ability to recover the carrying value of our identifiable intangible assets ~~both identifiable intangibles and goodwill,~~ is dependent upon the future cash flows of the related ~~acquired businesses and~~ assets. We make judgments and assumptions regarding future cash flows, including ~~sales~~net revenues levels, gross profit margins, operating expense levels, working capital levels, and capital expenditures. With respect to identifiable ~~intangibles~~intangible assets and fixed assets, we also make judgments and assumptions regarding useful lives.

~~Table of Content~~s

We consider the following factors in evaluating events and circumstances for possible impairment: (i) significant under-performance relative to historical or projected operating results; (ii) negative industry trends; (iii) ~~sales~~net revenues levels of specific groups of products (related to specific identifiable intangibles); (iv) changes in overall business strategies; and (v) other factors.

If actual cash flows are less favorable than projections, this could trigger impairment of identifiable intangible assets and other long-lived assets. ~~If impairment were to occur, this would negatively affect overall results of operations. Aside from the Magellan matter noted above, no~~No triggering events have been identified by the Company for ~~fiscal 2019, 2018~~

~~2017.~~the years ended September 30, 2022, 2021 and 2020.

(i)	Revenue Recognition and Accounts Receivable -

~~Adoption of New Standard~~

~~On October 1, 2018, we adopted ASU No.~~

~~2014-09,~~

Revenue ~~from Contracts with Customers~~

, using the modified retrospective transition method applied to those contracts that were not completed as of that date. Results for reporting periods beginning on or after October 1, 2018 are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with previously applicable guidance.

Upon adoption, we recorded a reduction of $116 to the opening balance of retained earnings as of October 1, 2018. This adjustment is related to writing off the book value of clinical diagnostic testing instruments located at customers for which there is no contractual arrangement for the instrument to be returned to the Company. Instruments placed with customers under an agreement to return the instrument to the Company were reclassified to machinery and equipment. Prior to adoption of the new guidance, all instruments placed with customers were capitalized and amortized over an estimated three-year utilization period, with the net balance reflected as deferred instrument costs.

~~The following table summarizes the impact of the new revenue standard on our opening balance sheet:~~

Balance at
September 30,
2018

New
Revenue
Standard
Adjustment

Balance at
October 1,
2018

PROPERTY, PLANT AND EQUIPMENT

Machinery, equipment and furniture
$
50,606
$
8,696
$
59,302

Accumulated depreciation and amortization

(55,846
)
(7,611
)
(63,457
)
OTHER ASSETS

Deferred instrument costs, net

1,239

(1,239
)
—

NON-CURRENT
LIABILITIES

Deferred income taxes

(3,769
)
38

(3,731
)
SHAREHOLDERS’ EQUITY

Retained earnings

(49,602
)
116

(49,486
)

The adoption of this new standard had an immaterial impact on our reported total revenues and operating income, as compared to what would have been reported under the prior standard. Our accounting policies under the new standard were applied prospectively and are noted below following the discussion of Revenue Disaggregation.

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~~Revenue Disaggregation~~

Recognition Policies

~~The following tables present our revenues disaggregated by major geographic region, major product platform and disease state (Diagnostics only):~~

~~Revenue by Reportable Segment & Geographic Region~~

2019 vs.
2018

2018 vs.
2017

2019

2018

2017

Inc (Dec)

Inc (Dec)

Diagnostics-

Americas
$

110,135
$

123,916
$

117,161

(11
)%
6
%
EMEA

23,865

23,922

22,594

—
%
6
%
ROW

2,682

2,616

3,766

3
%
(31
)%

Total Diagnostics

136,682

150,454

143,521

(9
)%
5
%

Life Science-

Americas

19,443

21,080

20,265

(8
)%
4
%
EMEA

29,157

24,715

22,365

18
%
11
%
ROW

15,732

17,322

14,620

(9
)%
18
%

Total Life Science

64,332

63,117

57,250

2
%
10
%

Consolidated
$
201,014
$
213,571
$
200,771

(6
)%
6
%

~~Revenue by Product Platform/Type~~

2019 vs.
2018

2018 vs.
2017

2019

2018

2017

Inc (Dec)

Inc (Dec)

Diagnostics-

Molecular assays
$
26,231
$
33,709
$
33,712

(22
)%
—
%
Immunoassays & blood chemistry assays

110,451

116,745

109,809

(5
)%
6
%

Total Diagnostics
$
136,682
$
150,454

$

143,521

(9
)%
5
%

Life Science-

Molecular reagents
$
23,261
$
24,533
$
21,966

(5
)%
12
%
Immunological reagents

41,071

38,584

35,284

6
%
9
%

Total Life Science
$
64,332
$
63,117
$
57,250

2
%
10
%

~~Revenue by Disease State (Diagnostics only)~~

2019 vs.
2018

2018 vs.
2017

2019

2018

2017

Inc (Dec)

Inc (Dec)

Diagnostics-

Gastrointestinal assays
$
68,977
$
78,803
$
79,022

(12
)%
—

%
Respiratory illness assays

26,622

28,911

23,881

(8
)%
21
%
Blood chemistry assays

19,082

19,109

18,212

—
%
5
%
Other

22,001

23,631

22,406

(7
)%
5
%

Total Diagnostics
$
136,682
$
150,454
$
143,521

(9
)%
5
%

~~Table of Contents~~

~~Revenue Policies~~

Product Sales

Revenue from contracts with customers is recognized in an amount that reflects the consideration we expect to receive in exchange for products when obligations under such contracts are satisfied. Revenue is generally recognized at a

point-in-time

when products are shipped, and ~~title~~control has passed to the customer. Such contracts can include various combinations of products that are generally accounted for as distinct performance ~~obligations~~

.obligations.

Revenue is reduced in the period of sale for fees paid to distributors, which are inseparable from the distributor’s purchase of our product and for which we receive no goods or services in return. Revenue ~~for the Diagnostics segment~~ is reduced at the date of sale for product price adjustments payable to certain distributors under local contracts. Management estimates accruals for distributor price adjustments based on local contract terms, sales data provided by distributors, historical statistics, current trends, and other factors. Changes to the accruals are recorded in the period that they become known. Such accruals are netted against accounts receivable.

Shipping and handling costs incurred after control of the product is transferred to our customers are treated as fulfillment costs and not a separate performance obligation.

Our payment terms differ by jurisdiction and customer, but payment is generally required in a term ranging from 30 to 90 days from the date of shipment or satisfaction of the performance obligation. ~~Trade accounts~~Accounts receivable are recorded in the ~~accompanying~~ Consolidated Balance Sheets at invoiced amounts less provisions for distributor price adjustments under local contracts and doubtful accounts. The allowance for doubtful accounts represents our estimate of probable credit losses and is based on historical

write-off

experience and known conditions that would likely lead to

non-payment.

Customer invoices are charged off against the allowance for doubtful accounts when we believe it is probable that the invoices will not be paid. The Company specifically considered the impact of the ongoing COVID-19 pandemic on its accounts receivable and determined there was no material impact on existing accounts receivable at September 30, 2022 or 2021.

Practical Expedients and Exemptions

Revenue is recognized net of any taxes collected from customers (sales tax, value added tax, etc.), which are subsequently remitted to government authorities.

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Our diagnostic assay products are generally not subject to a customer right of return except for product recall events under the rules and regulations of the U.S. Food and Drug Administration (“FDA”) or equivalent agencies outside the ~~United States.~~U.S. In this circumstance, the costs to replace or refund affected products would be accrued at the time a loss was probable and estimable.

We expense as incurred the costs to obtain contracts, as the amortization period would ~~have been~~be one year or less. These costs, recorded within selling and marketing expense, include our internal sales force compensation programs and certain partner sales incentive programs, as we have determined that annual compensation is commensurate with annual selling activities.

Reagent Rental Arrangements

~~Our Revogene, Alethia and LeadCare~~Certain of our Diagnostics segment’s product platforms require the use of instruments for the tests to be processed. In many cases, a customer is given use of the instrument provided they continue purchasing the associated tests, also referred to as “consumables” or ~~“reagents”.~~“reagents.” If a customer stops purchasing the consumables, the instrument must be returned to ~~Meridian.~~us. Such arrangements are common practice in the diagnostics industry and are referred to as “Reagent ~~Rentals”.~~Rentals.” Reagent Rentals may also include instrument related services such as a limited replacement warranty, training and installation. We concluded that the use of the instrument and related services (collectively known as “lease elements”) are not within the scope of ~~ASU No.~~Accounting Standards Codification (“ASC”) 606,

~~2014-09~~

Revenue from Contracts with Customers

but rather ~~ASU~~

~~2016-02,~~

ASC 842,

Leases

. Accordingly, we first allocate the transaction price between the lease elements and the

non-lease

elements based on estimates of relative standalone selling prices. Lease revenue is derived solely from the sale of consumables and is therefore recognized monthly as earned, which coincides with the transfer of control of the

non-lease

elements.

For the portion of the transaction price allocated to the

non-lease

elements, which are principally the test kits, the related revenue ~~will be~~is recognized at a

point-in-time

when control transfers.

~~Table of Contents~~

~~Revenue allocated to the lease elements of these Reagent Rental arrangements represent approximately~~

~~of total revenue and are included as part of net revenues in our Consolidated Statements of Income.~~

(j)

Fair Value Measurements –

~~Assets~~- Certain assets and liabilities are recorded at fair value in accordance with ~~Accounting Standards Codification (“ASC”)~~

~~820-10,~~

ASC 820,

Fair Value Measurements and Disclosures

. ASC

~~820-10~~

820 defines fair value as the price that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC

~~820-10~~

~~requires~~ 820 establishes a ~~three level~~three-level hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy level assigned to each asset and liability is based on the assessment of the transparency and reliability of the inputs used in the valuation of such items at the measurement date based on the lowest level of input that is significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities ~~(level~~(Level 1 measurements) and the lowest priority to unobservable inputs ~~(level~~(Level 3 measurements).

Assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories based on inputs:

Level 1

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities

Level 2

Quoted prices in markets that are not active and financial instruments for which all significant inputs are observable, either directly or indirectly

Level 3

Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable

~~As indicated in Note 2,~~

~~we acquired the business of GenePOC in fiscal 2019. The fair value of the acquired accounts receivable and other~~

current assets and the fair value of the assumed accounts payable and accrued expenses approximated their carrying value at the acquisition date. Inventories, property, plant and equipment, intangible assets and contingent consideration were valued using Level 3 inputs.

The following table provides information by level for financial assets and liabilities that are measured at fair value on a recurring basis, noting that there were no such items as of September 30, 2018:

Fair Value Measurements Using
Inputs Considered as

As of September 31, 2019

Carrying
Value

Level 1

Level 2

Level 3

Contingent consideration
$

27,200
$

—
$

—
$
27,200

In connection with the acquisition of the business of GenePOC and as set forth in Note 2, the Company is required to make contingent consideration payments of up to $70,000, comprised of $20,000 for achievement of product development milestones and up to $50,000 for achievement of certain financial targets. The preliminary fair value for the contingent payments recognized upon the acquisition as part of the purchase accounting opening balance sheet totaled $27,200. The preliminary fair value of the development milestone payments was estimated by discounting the probability-weighted contingent payments to present value. Assumptions used in the calculations were probability of success, duration of the

~~earn-out~~

and discount rate. The preliminary fair value of the financial performance target payments was determined using a Monte Carlo simulation-based model. Assumptions used in these calculations were expected revenue, probability of certain developments, expected expenses and discount rate. The ultimate settlement of contingent consideration could deviate from current estimates based on the actual results of these financial measures. The liability is considered to be a Level 3 financial liability that is

~~re-measured~~

~~each reporting period.~~

~~- 5~~

~~Table of Contents~~

(k)

Research and Development Costs

- Research and development costs are charged to expense as incurred. Research and development costs include, among other things, salaries and wages for research scientists, materials and supplies used in the development of new products, costs for development of instrumentation equipment, costs for clinical trials, costs of regulatory compliance activities, and costs for facilities and ~~equipment~~

.equipment.

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(l)

Income Taxes

The provision for income taxes includes federal, foreign, state and local income taxes currently payable and those deferred because of temporary differences between income for financial reporting and income for tax purposes. We prepare estimates of permanent and temporary differences between income for financial reporting purposes and income for tax purposes. These differences are adjusted to actual upon filing of our tax returns, typically occurring in the third and fourth quarters of the current fiscal year for the preceding fiscal year’s estimates.

The Company has certain deferred income tax assets in select jurisdictions. The recoverability of these deferred income tax assets is assessed periodically, and valuation allowances are recognized if it is determined that it is more likely than not that the benefits will not be realized. When performing the assessment, the Company considers the ability to carryback losses to prior tax periods, future taxable income, the reversal of existing temporary differences, and tax planning strategies.

We account for uncertain tax positions using a benefit recognition model with a

two-step

approach: (i) a

more-likely-than-not

recognition criterion; and (ii) a measurement attribute that measures the position as the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon ultimate settlement. If it is not more likely than not that the benefit will be sustained on its technical merits, no benefit is recorded. We recognize accrued interest related to unrecognized tax benefits as a portion of our income tax provision in the Consolidated Statements of Operations. ~~See Note 6.~~

(m)	Stock-Based Compensation - We recognize compensation expense for all share-based awards made to employees based upon the fair value of the share-based award on the date of the grant. ~~See Note 7(b).~~

(n)

Comprehensive Income (Loss)

- Comprehensive income (loss) represents the net change in shareholders’ equity during a period from sources other than transactions with shareholders. As reflected in the ~~accompanying~~ Consolidated Statements of Comprehensive Income, our comprehensive income is comprised of net earnings, foreign currency translation, ~~unrecognized~~recognition of gains on previous cash flow hedges, unrealized gain (loss) on ~~termination of our previous~~current cash flow hedge, and the income taxes thereon.

The primary component of accumulated comprehensive income (loss) is cumulative currency translation adjustments, which totaled ($11,794) and $135 at September 30, 2022 and 2021, respectively.

(o)	Shipping and Handling Costs - Shipping and handling costs invoiced to customers are included in net revenues. Costs to distribute products to customers, including freight costs, warehousing costs, and other shipping and handling activities are included in cost of sales.

(p)

Non-Income Government-Assessed Taxes

- We classify all non-income, government-assessed taxes (sales, use and value-added) collected from customers and remitted by us to appropriate revenue authorities, on a net basis (excluded from net revenues) in the ~~accompanying~~ Consolidated Statements of Operations.

(q)

Acquisition

- Assets and liabilities associated with business acquisitions are recorded at fair value, using the acquisition method of accounting. The Company allocates the purchase price of acquisitions based upon the fair value of each component, which may be derived from observable or unobservable inputs and assumptions. The Company may utilize third-party valuation specialists to assist us in this allocation. Initial purchase price allocations are preliminary and subject to revision within the measurement period, generally not to exceed one year from the date of acquisition.

(r)

Other expense, net

- Other expense, net, consists principally of transaction currency gains or losses. When a transaction is denominated in a currency other than the subsidiary’s functional currency, the Company recognizes a transaction gain or loss in other expense, net within the Consolidated Statements of Operations when the transaction is settled.

From time to time, the Company enters into short-term (generally 30 days or less) foreign currency forward contracts to manage its exposure to certain foreign currencies. These foreign currency forward contracts are not designated as hedging instruments and, therefore, all changes in fair value and the settlement of the foreign current forward contracts is recorded in other expense, net within the Consolidated Statement of Operations. For the years ended September 30, 2022, 2021 and 2020, we recognized losses of approximately $2,100, $100, and $0, respectively related to foreign currency forward contracts.

- 56 -

Table of Contents

(s)	Recent Accounting Pronouncements –-

Pronouncements Adopted

~~As described in Note 1(i) above,~~On October 1, 2021, the Company adopted ~~ASU No.~~Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2019-12,

Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

~~2014-09,~~

~~Revenue from Contracts with Customers~~

~~, on October 1, 2018 using the modified retrospective transition method.~~

(“ASU

2019-12

~~In August 2016, the FASB issued ASU~~

~~2016-15,~~

~~Classification of Certain Cash Receipts~~”), which clarified and ~~Cash Payments~~

. The update addresses certain specific cash flows and their treatment, with the objective being to reduce the existing diversity in how the items are presented and classified within the statement of cash flows. The Company adopted this guidance in the first quarter of fiscal 2019, with the Condensed Consolidated Statements of Cash Flows reflecting such adoption, including the information related to restricted cash.

~~In January 2017, the FASB issued ASU~~

~~2017-01,~~

~~Clarifying the Definition of a Business~~

~~. Included within the standard is guidance designed to improve consistency in~~simplified accounting for ~~acquisition and disposition transactions. Specifically,~~income taxes by eliminating certain exceptions for intraperiod tax allocation principles, the ~~guidance sets forth a~~

~~two-step~~

~~process of determining if a “business” or an “asset” has, in fact, been acquired or disposed of. Adoption and implementation of this guidance was effective~~methodology for ~~the Company at the beginning of fiscal 2019, with the guidance being adhered to in accounting for the acquisition of the GenePOC business in June 2019. See Note 2 below.~~

~~Table of Contents~~

~~In February 2018, the FASB issued ASU~~

~~2018-02,~~

~~Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income~~

~~, to address certain of the recent U.S. federal~~calculating income tax ~~legislation’s~~rates in an interim period, and recognition of deferred taxes for outside basis differences in an investment, among other updates. Adoption of ASU

2019-12

did not have a material impact on ~~Accumulated Other Comprehensive Income (“AOCI”). The guidance specifically provides~~ the option of reclassifying “stranded tax effects” related to the tax legislation from AOCI to retained earnings. The Company elected to adopt this guidance in the third quarter of fiscal 2019. An election was made to reclassify the income tax effects of the Tax Cuts and Jobs Act from AOCI to retained earnings, and an entry was made to increase AOCI and decrease retained earnings by $148. The Company’s accounting policy is to release the income tax effects in other comprehensive income as financial amounts are removed.Consolidated Financial Statements.

Pronouncements Issued but Not Yet Adopted as of September 30, ~~2019~~

2022

In ~~February 2016,~~March 2020, the FASB issued ASU

~~2016-02,~~

2020-04,

~~Leases~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

, to provide temporary optional guidance relating to reference rate reform, particularly as it relates to easing the potential burden resulting from the expected discontinuation of the London Interbank Offered Rate (“LIBOR”). The guidance provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met, which ~~amends~~may be applied through December 31, 2022. The Company continues to evaluate the ~~accounting~~impacts of this guidance ~~related~~but does not expect its application to leases. These changes, which are designed to increase transparency and comparability among organizations for both lessees and lessors, include, among other things, requiring recognition of lease assets and liabilitieshave a material impact on the ~~balance sheet and disclosing key information about leasing arrangements. Adoption and implementation of~~Consolidated Financial Statements.

No other new accounting pronouncements recently adopted or issued had or are expected to have a material impact on the ~~guidance is not required by the Company until the beginning of fiscal 2020, although early adoption is permitted. The Company adopted ASU~~

~~2016-02~~Consolidated Financial Statements.

effective October 1, 2019 using the modified retrospective method, which was applied to leases that existed or will be entered into on or after such date. The Company anticipates that as a result of such adoption, it will record to its balance sheet approximately $6,000 of

~~right-of-use~~

~~assets and lease liabilities as of October 1, 2019~~

~~(r)~~

(t)

Reclassifications

~~Reclassifications~~-

~~- Certain~~

Within the notes to the Consolidated Financial Statements, certain reclassifications have been made to the prior ~~fiscal~~ year ~~financial statements~~allocation of expenses between segments in order to conform to the current year presentation. Such reclassifications had no impact on any consolidated figures or segment net ~~earnings or shareholders’ equity.~~revenues.

(2)	Revenue Recognition

~~(2)~~

~~Acquisition of Business of GenePOC~~

~~On June 3, 2019, we acquired the business of GenePOC Inc. (“GenePOC”), a Quebec City, Quebec Province, Canada based provider of molecular diagnostic instruments~~The following tables present our net revenues disaggregated by major geographic region, major product platform and ~~assays. The purchase agreement contemplates a maximum total consideration of up to $~~

~~120,000~~

~~, which based upon the current preliminary valuation is estimated at a total fair value of approximately $~~

~~77,526~~

. Pursuant to the purchase agreement, the maximum consideration is comprised of the following (noting that the current preliminary valuation values the contingent consideration identified in (ii) and (iii) below at an aggregate amount of approximately $

~~27,200~~

)disease state (Diagnostics segment only):

~~(i)~~

~~a $50,000 cash payment on June 3, 2019, subject to a working capital adjustment and a holdback of $5,000 to secure selling party’s performance of certain post-closing obligations;~~


	~~(ii)~~	~~two $10,000 installments contingent upon the achievement of certain product development milestones if achieved by September 30, 2020 and March 31, 2021, respectively; and~~

~~(iii)~~

~~up to $50,000 of contingent consideration payable if certain financial performance targets are achieved during the twelve-month period ending September 30, 2022.~~

The total of the holdback identified in (i) above and the currently estimated value of the contingent consideration identified in (ii) and (iii) above are reflected as acquisition consideration within the

~~non-current~~

~~liabilities section of the accompanying Condensed Consolidated Balance Sheets. The holdback amounts are due to be settled in December 2020, following the~~

~~18-month~~

~~anniversary of the transaction.~~

~~We utilized~~

~~cash and equivalents on hand and proceeds drawn from our new $125,000 revolving credit facility, which replaced our previous credit facility~~

~~, to finance the acquisition.~~

~~Proceeds from the new credit facility were also utilized to repay and settle the outstanding principal and interest due on our term loan (see Note~~

). As a result of currently estimated total consideration exceeding the preliminary fair value of the net assets acquired, goodwill in the amount of $34,582 was recorded in connection with this acquisition, which

~~will~~

~~be deductible for~~

tax purposes ratably over 15 years. The goodwill results largely from Meridian’s ability to market and sell GenePOC’s technology and instrument platform through its established customer base and distribution channels.

Net Revenues by Reportable Segment & Geographic Region


Year Ended September 30,	2022		2021		2020
Diagnostics-
Americas	$	132,175	$	101,293	$	97,228
EMEA		22,135		24,475		21,826
ROW		1,593		1,992		2,078

Total Diagnostics		155,903		127,760		121,132

Life Science-
Americas		33,062		46,063		37,391
EMEA		81,305		93,655		58,125
ROW		62,748		50,418		37,019

Total Life Science		177,115		190,136		132,535

Consolidated	$	333,018	$	317,896	$	253,667

557

Table of Contents

~~Our~~

Net Revenues by Product Platform/Type


Year Ended September 30,	2022		2021		2020
Diagnostics-
Molecular assays	$	18,177	$	19,037	$	21,907
Non-molecular assays		137,726		108,723		99,225

Total Diagnostics		155,903		127,760		121,132

Life Science-
Molecular reagents		91,816		130,537		78,431
Immunological reagents		85,299		59,599		54,104

Total Life Science		177,115		190,136		132,535

Consolidated	$	333,018	$	317,896	$	253,667

Net Revenues by Disease State (Diagnostics only)


Year Ended September 30,	2022		2021		2020
Diagnostics-
Gastrointestinal assays	$	87,568	$	68,890	$	55,040
Respiratory illness assays		26,632		17,608		26,694
Blood chemistry assays		14,189		15,398		17,534
Other		27,514		25,864		21,864

Total Diagnostics	$	155,903	$	127,760	$	121,132

Royalty Income

Royalty income received from a third party related to sales of

H. pylori

products, totaled approximately $6,750, $6,330 and $3,540 for the years ended September 30, 2022, 2021 and 2020, respectively. Such revenue is included as part of Non-molecular assays and Other within the Net Revenues by Product Platform/Type and Net Revenues by Disease State tables, respectively, above.

Reagent Rental Arrangements

Revenue allocated to the lease elements of Reagent Rental arrangements totaled approximately $3,925, $3,710 and $4,600 for the years ended September 30, 2022, 2021 and 2020, respectively. Such revenue is included as part of net revenues in our Consolidated Statements of Operations.

(3)	Fair Value Measurements

To limit exposure to volatility in the LIBOR interest rate, the Company has entered into interest rate swap agreements, which effectively convert the variable interest rate on the outstanding revolving credit facility discussed in Note 10 to a fixed rate. The fair values of the interest rate swap agreements were determined by reference to a third-party valuation, which is considered a Level 2 input within the fair value hierarchy of valuation techniques. In conjunction with the paydown of $25,000 on the revolving credit facility in March 2022, a $25,000 interest rate swap agreement was terminated, resulting in a gain of $935, which is recorded in other expense, net in our Consolidated Statement of Operations for the year ended September 30, 2022.

As indicated in Note 4, we acquired EUPROTEIN Inc. of North Brunswick, New Jersey (“EUPROTEIN”) on April 30, 2022 and BreathTek on July 31, 2021. The fair values of inventories acquired were valued using Level 2 inputs, which included data points that were observable, such as established values of comparable assets and historical sales information (market approach). Identifiable intangible assets, if applicable and specifically the acquired customer relationships, were valued using Level 3 inputs, which are unobservable by nature, and included internal estimates of future cash flows and attrition rates (income approach). Significant increases (decreases) in any of those unobservable inputs, as of the date of the acquisition, in isolation would result in a significantly lower (higher) fair value measurement.

- 5

Table of Contents

In connection with the acquisition of the business of GenePOC, Inc. (“GenePOC”) in fiscal 2019 ~~includes $1,808~~and subsequent amendments to modify certain terms of ~~acquisition-related costs~~the agreement related to contingent consideration achievement levels and milestone dates, the Company was required to make contingent consideration payments of up to $64,000 (originally $70,000 at the acquisition date), comprised of up to $14,000 for achievement of product development milestones (originally $20,000 at the acquisition date) and up to $50,000 for achievement of certain financial targets. The fair value for the contingent consideration recognized upon the acquisition as part of the purchase price allocation was $27,202. Giving effect to subsequent agreements to modify certain terms of the agreement related to contingent consideration achievement levels and milestone dates, the fair value of the product development milestone payments were estimated by discounting the probability-weighted contingent payments to present value and presented on the Consolidated Balance Sheets based on the Company’s anticipated date of payment at each reporting period. Assumptions used in the calculations included probability of success, duration of the earn-out and discount rate, with such calculations being updated for the effect of the previously noted amendments to the contingent consideration achievement levels and milestone dates. The fair value of the financial performance target payments was determined using a Monte Carlo simulation-based model. Assumptions used in these calculations included expected net revenues, probability of certain developments, expected expenses and discount rate. In August 2021, the Company paid $20,000 to settle the contingent consideration obligation, resulting in a $909 net gain for the year ended September 30, 2021.

The following table provides information by level for financial assets and liabilities that are measured at fair value on a recurring basis

, the carrying values for which are included within other assets and other non-current liabilities of the September 30, 2022 and 2021 Consolidated Balance Sheets, respectively


				Fair Value Measurements Using Inputs Considered as
	Carrying Value			Level 1		Level 2			Level 3
Interest rate swap agreements -
As of September 30, 2022	$	1,421		$	—	$	1,421		$	—
As of September 30, 2021	$	(203	)	$	—	$	(203	)	$	—

Supplemental Cash Flow Information (Non-Cash Acquisition Consideration)

In arriving at the $20,000 settlement payment in fiscal 2021, the acquisition consideration obligation related to acquisition of the GenePOC business decreased $909 during the year ended September 30, 2021, due in large part to amendment of certain terms of the original contingent consideration achievement levels and milestone dates, as well as the settlement in August 2021.

(4)	Business Combinations

Acquisition of EUPROTEIN

On April 30, 2022, we acquired substantially all of the assets of EUPROTEIN for $4,250 in cash, of which $3,750 was paid at closing, with the remainder held back for final closing adjustments, which is recorded in other non-current liabilities on the Consolidated Balance Sheets and is payable within 18 months of the acquisition date. EUPROTEIN offers custom development and production of high-quality bioresearch reagents, with a particular focus on human and other mammalian proteins and recombinant monoclonal antibodies. The acquired assets of EUPROTEIN are included within the Life Science segment and are expected to help the Company accelerate its pipeline of new immunological reagents, while expanding recombinant capabilities. The acquired assets, which are ~~reflected~~comprised of goodwill, property, plant and equipment, prepaid expenses, and inventories, were valued on April 30, 2022, on a preliminary basis at $3,947, $279, $14 and $10, respectively.

The goodwill for EUPROTEIN is attributable to combining EUPROTEIN and Meridian’s products and capabilities to give the Company’s customers access to new immunological reagents. The goodwill is not expected to be deductible for income tax purposes. The preliminary purchase price allocation may change in the future as the fair valuing of assets is completed.

~~operating expenses.~~

~~Most~~

Table of ~~these costs relate~~Contents

Acquisition of BreathTek Business

On July 31, 2021, we acquired BreathTek, a urea breath test for the detection of

H. pylori

, from Otsuka America Pharmaceutical, Inc. Cash consideration totaled $19,585, subject to ~~professional fees for attorneys, tax advisors~~a $1,000 holdback, which is recorded in other accrued expenses and ~~regulatory advisors~~other non-current liabilities on the Consolidated Balance Sheets as of September 30, 2022 and 2021, respectively, to secure the selling party’s performance of certain post-closing obligations and is payable 15 months following the BreathTek acquisition date. As part of the acquisition, we acquired BreathTek inventories and assumed the customer relationships to supply the BreathTek product in North America. Giving effect to purchase adjustments made during ~~due diligence,~~the permitted measurement period to increase the value of acquired inventories by approximately $100, the final acquired inventories and customer relationships were valued on July 31, 2021 at $9,955 and $9,630, respectively, with the ~~preparation and negotiation~~useful life of ~~acquisition agreements.~~

the customer relationships estimated at five years.

The Company’s ~~fiscal 2019~~

consolidated results

include ~~$341 of net revenues and $3,848 of net loss~~approximately the following from ~~the GenePOC business since the date of acquisition.~~ BreathTek products:


Year Ended September 30,	2022		2021
Net revenues	$	23,100	$	3,840
Net earnings		7,500		1,000

These results, which are reported as part of the Diagnostics segment, include ~~$1,204 of~~ amortization ~~of specific identifiable assets~~expense related to the customer relationships recorded in the ~~opening balance sheet, including a license agreement, technology~~purchase price allocation totaling $1,919 and ~~a government grant.~~$324 for the years ended September 30, 2022 and 2021, respectively.

~~Preliminary Purchase Price Allocation~~

~~The recognized preliminary amounts of identifiable assets acquired and liabilities assumed in the acquisition of the GenePOC business are as follows:~~

PRELIMINARY

June 3,
2019

(as initially
reported)

Measurement
Period
Adjustments

June 3,
2019
(as adjusted)

Fair value of assets acquired -

Accounts receivable

$
58

$
(1
)
$
57

Inventories

1,617

(106
)
1,511

Other current assets

77

7

84

Property, plant and equipment

1,520

(96
)
1,424

Goodwill

34,482

100

34,582

Other intangible assets (estimated useful life):

License agreement (10 years)

5,990

—

5,990

Technology (15 years)

34,040

96

34,136

Government grant (1.33 years)

800

—

800

78,584

—

78,584

Fair value of liabilities assumed -

Accounts payable and accrued expenses

1,082

(24
)
1,058

Total consideration paid (including contingent consideration currently estimated at $27,200)
$
77,502
$
24
$
77,526

The allocation of the purchase price and estimated useful lives of property, plant and equipment, and intangible assets shown above remain preliminary and subject to adjustment, pending refinement and final completion of valuations, including but not limited to valuations of accounts receivable, inventory, other current assets, property, plant and equipment, and intangibles. Any modifications to the valuation of assets acquired and liabilities assumed will result in an adjustment to goodwill.

Unaudited Pro Forma Information ~~(Unaudited)~~

The following table provides the unaudited consolidated pro forma results for the periods presented as if the BreathTek business ~~of GenePOC~~ had been acquired as of the beginning of fiscal ~~2018. Pro forma results do~~2021:


Year Ended September 30,	2022		2021
Net revenues	$	333,018	$	337,118
Net earnings		42,459		77,066

Based on the nature of the EUPROTEIN business, EUPROTEIN is not ~~include~~expected to contribute materially to net revenues and net earnings and therefore, no amounts are included in the table above.

(5)	Lead Testing Matters

On September 1, 2021, the Company’s wholly owned subsidiary Magellan announced the expansion of the Class I voluntary recall of its LeadCare test kits for the detection of lead in blood, which it had initiated in May 2021 after identifying an issue in certain manufactured lots of its LeadCare test kits. As a result of the identified issue, impacted test kit lots could potentially underestimate blood lead levels when processing patient blood samples. Although it was initially believed that the root cause of the issue related to the plastic containers used for the treatment reagent, additional studies have indicated that the root cause related to the third-party-sourced cardboard trays that held the treatment reagent containers. Upon correction of the identified supplier issue, shipment of product resumed during the second quarter of fiscal 2022. The Company continues to work closely with the FDA in its execution of the recall activities, which

has included

Magellan notifying customers and distributors affected by the recall and providing instructions for the return of impacted test kits. Of the $5,100 estimated and accrued as of September 30, 2021 to cover the estimated costs of the recall, it was estimated at September 30, 2022 that the remaining costs of the recall exceeded the amount accrued, and as a result, an adjustment was made to the product recall reserve. The effect of ~~any synergies anticipated to be achieved from~~this adjustment is reflected in product recall costs (adjustment) within the ~~acquisition,~~Consolidated Statement of Operations for the year ended September 30, 2022, and ~~accordingly, are not necessarily indicative~~results in approximately $430 of ~~the results that would have occurred if the acquisition had occurred on the date indicated or that may result~~remaining accrued product recall costs reflected in the ~~future.~~

Year Ended September 30,

2019

2018

Net Revenues
$
201,222
$
213,753

Net Earnings
$
16,093
$
9,407

Consolidated Balance Sheet as of September 30, 2022. Anticipated recall-related costs primarily include

-temporary labor costs,

product replacement and/or refund costs, mailing/shipping costs, attorneys’ fees and other miscellaneous costs. Information utilized in the accrual estimation process includes observable inputs such as customer on-hand inventory data, product sales data, average sales price, and product inventory turns, among other things.

Table of Contents

On April 17, 2018, the Company’s wholly owned subsidiary Magellan received a subpoena from the U.S. Department of Justice (“DOJ”) regarding its LeadCare product line. The subpoena outlined 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, including responding to additional information requests that have followed receipt of the subpoena in April 2018. The Company has executed tolling agreements to extend the statute of limitations. In March and April 2021, DOJ issued two subpoenas, both to former employees of Magellan, calling for witnesses to testify before a federal grand jury related to this matter. In September and October 2021, DOJ issued additional subpoenas to individuals seeking testimony and documents in connection with its ongoing investigation. It is the Company’s understanding that multiple witnesses have testified before the federal grand jury and the DOJ’s investigation is ongoing. Discussions continue with the DOJ to explore resolution of the matter. As of September 30, 2022,

in accordance with applicable accounting guidance,

the Company believes a loss is probable in the DOJ LeadCare legal matter and has accrued $10,000 as

an estimate of the cost to resolve the DOJ LeadCare legal matter, which is reflected in litigation and select legal costs within the Consolidated Statement of Operations for the year ended September 30, 2022. The Company estimated this cost based on discussions with the DOJ. The Company cannot predict when the investigation will be resolved or the outcome of the investigation, and the ultimate resolution of the DOJ LeadCare legal matter may exceed the amount accrued at September 30, 2022 and could be material to the Company. Expense for attorneys’ fees related to this matter

totaling $3,510, $2,803 and $2,035 is included within the Consolidated Statements of Operations for the years ended September 30, 2022, 2021 and 2020, respectively.

Magellan submitted 510(k) applications in December 2018, seeking to reinstate venous blood sample-types for its LeadCare II, LeadCare Plus and LeadCare Ultra testing systems. In the second fiscal quarter of 2019, the FDA informed Magellan that each of these 510(k) applications had been put on Additional Information hold. On July 15, 2019, we provided responses to the FDA’s requests for Additional Information. These ~~pro forma amounts~~510(k) applications have ~~been calculated~~since expired and are no longer under FDA review. Further, while Magellan’s LeadCare testing systems remain cleared for marketing by ~~including~~the FDA and permitted for use with capillary blood samples, the FDA advised that it has commissioned a third-party study of the Company’s LeadCare testing systems using both venous and capillary blood samples. According to the FDA, the results of ~~GenePOC,~~the field study will be used in conjunction with other information to determine whether further action by the FDA or the Centers for Disease Control and ~~adjusting~~Prevention (“CDC”) is necessary to protect the ~~combined results~~public health. The Company intends to ~~give effect~~fully cooperate with the FDA or CDC on any follow-up based on the third-party study.

During October 2019, the FDA performed a follow-up inspection of Magellan’s manufacturing facility. The FDA issued five Form FDA 483 observations. On March 18, 2020, we participated in a regulatory meeting with the FDA at the FDA’s request to further discuss the Form FDA 483 observations and our remediation efforts. Since the inspection, we have submitted a number of written responses to the ~~following, as if~~FDA regarding the ~~acquisition had been consummated~~five Form FDA 483 observations issued in the October 2019 inspection, and have worked diligently to execute a remediation plan. During October 2020, the FDA issued Establishment Inspection Reports which closed out the inspections from June 2017 and October 2019 under 21 C.F.R.20.64(d)(3).

Table of Contents

(6)	Cash and Cash Equivalents

Cash and cash equivalents are comprised of the following:


As of September 30,	2022		2021
Institutional money market funds	$	1,027	$	1,020
Cash on hand, unrestricted		80,426		48,751

Total	$	81,453	$	49,771

Cash equivalents and institutional money market funds are classified within Level 1 ~~201~~of the fair value hierarchy. Financial instruments classified as Level 1 are based on quoted market prices in active markets. The Company does not adjust the quoted market price for such financial instruments.

(7)	Inventories, Net

Inventories, net are comprised of the following:


As of September 30,	2022		2021
Raw materials	$	15,726	$	14,843
Work-in-process		21,570		25,072
Finished goods - instruments		1,796		2,260
Finished goods - kits and reagents		28,722		34,667

Total	$	67,814	$	76,842

(8)	Goodwill and Other Intangible Assets, Net

During fiscal 2022, goodwill increased $1,634, comprised of the following: (i) a $492 decrease in Diagnostics segment goodwill; and (ii) a $2,126 increase in Life Science segment goodwill. This overall increase in goodwill reflects $3,947 of goodwill acquired in the EUPROTEIN acquisition (see Note 4), ~~together with~~partially offset by the ~~consequential tax~~ effects ~~thereon:~~of foreign currency translation.

During fiscal 2021, goodwill increased $482, reflecting: (i) a $56 increase from the currency translation adjustment on goodwill in the Diagnostics segment; (ii) a $433 increase from the currency translation adjustment on goodwill in the Life Science segment; and (iii) a $7 decrease related to Exalenz, reflecting additional measurement period adjustments.

A summary of Meridian’s intangible assets subject to amortization is as follows:


	2022				2021
As of September 30,	Gross Carrying Value		Accum. Amort.		Gross Carrying Value		Accum. Amort.
Manufacturing technologies, core products and cell lines	$	56,289	$	20,321	$	64,867	$	25,084
Tradenames, licenses and patents		18,257		10,491		18,489		9,492
Customer lists, customer relationships and supply agreements		52,703		22,363		54,941		19,649
Non-compete agreements		110		53		110		31

	$	127,359	$	53,228	$	138,407	$	54,256

The aggregate amortization expense for these intangible assets for the years ended September 30, 2022, 2021 and 2020 was $9,912, $8,776 and $7,744, respectively. The estimated aggregate amortization expense for these intangible assets for each of the five succeeding fiscal years is as follows: fiscal 2023 - $9,905, fiscal 2024 - $9,900, fiscal 2025 - $9,890, fiscal 2026 - $8,900 and fiscal 2027 - $6,645.

Year Ended September 30,

2019

2018

Adjustments to Net Revenues

GenePOC
pre-acquisition
revenues
$
208
$
182

Adjustments to Net Earnings

GenePOC
pre-acquisition
net loss
$
(9,578
) $
(12,775
)
Pro forma adjustments:

Meridian acquisition-related costs

1,808

—

GenePOC transaction-related costs

1,245

—

Expenses related to
non-continuing
personnel, locations

or activities

1,576

2,552

Incremental depreciation and amortization

(2,344
)
(3,499
)

Incremental interest costs

(743
)
(977
)

Tax effects of pro forma adjustments

(253
)
257

Total Adjustments to Net Earnings
$
(8,289
) $
(14,442
)

- 62 -

Table of Contents

(9)	Leasing Arrangements

The Company is party to several operating leases, the majority of which are related to office, warehouse and manufacturing space. The related operating lease assets and obligations are reflected within right-of-use assets, net, current operating lease obligations and long-term operating lease obligations on the Consolidated Balance Sheets. Lease expense for these leases is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred.

The lease costs for these operating leases reflected in our Consolidated Statements of Operations, as well as the right-of-use assets, net obtained during these periods in exchange for operating lease liabilities, are as follows:


Year Ended September 30,	2022		2021
Lease costs within cost of sales	$	905	$	795
Lease costs within operating expenses		1,406		1,542
Right-of-use assets, net obtained in exchange for operating lease liabilities		3,068		1,073

In addition, the Company periodically enters into other short-term operating leases, generally with an initial term of twelve months or less. These leases are not recorded on the Consolidated Balance Sheets and the related lease expense is immaterial for fiscal 2022, 2021 and 2020.

The Company often has options to renew lease terms, with the exercise of lease renewal options generally at the Company’s sole discretion. In addition, certain lease arrangements may be terminated prior to their original expiration date at our discretion. We evaluate renewal and termination options at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors. The discount rate implicit within our leases is generally not determinable and, therefore, the Company uses its incremental borrowing rate as the basis for its discount rate. The weighted average remaining lease term for our operating leases and the weighted average discount rate used to measure our operating leases were as follows:


As of September 30,	2022			2021
Weighted average remaining lease term		3.9 yrs.			3.6 yrs.
Average discount rate		3.5	%		3.2	%

Maturities of lease liabilities by fiscal year for the Company’s operating lease liabilities were as follows as of September 30, 2022:


2023	$	1,952
2024		1,614
2025		1,343
2026		780
2027		536
Thereafter		135

Total lease payments		6,360
Less amount of lease payment representing interest		(403	)

Total present value of lease payments	$	5,957

Table of Contents

Supplemental Cash Flow Information ~~(Non-Cash Acquisition Consideration)~~(Cash Paid for Amounts Included in Measurement of Lease Liabilities)

~~As noted above,~~

~~non-cash~~

acquisition consideration totaled $32,200 as of September 30, 2019, which is comprised of: (i) $5,000 of purchase price holdback; and (ii) $27,200 contingent upon achievement of established milestones. No such items existed in fiscal 2018 or 2017.

~~(3)~~

~~Restructuring~~

During the second quarter of fiscal 2018, the Company began implementation of a plan to realign its business structure into two business units, Diagnostics and Life Science, supported by a global corporate team. As part of this plan, certain functions and locations within both business units have been streamlined, including: (i) the elimination of certain executive management and commercial sales positions; (ii) the closing of Life Science locations in Taunton, Massachusetts and Singapore, the operations of which were transferred to

~~our existing~~

locations in Memphis, Tennessee and London, England, respectively; and (iii) the transfer of certain functions performed in the Billerica, Massachusetts Diagnostics facility to the corporate headquarters in Cincinnati, Ohio.

~~Further restructuring costs were incurred in fiscal 2019, as refinements to each business unit’s cost structure continued to be made and the Company’s previous CFO terminated employment.~~

~~As a result of these activities, restructuring costs totaling $2,839 and $6,332 were recorded during fiscal 2019 and fiscal 2018, respectively, the details of which are as follows:~~

2019

2018

Severance, other termination benefits and related costs
$
2,046
$
5,012

Lease and other contract termination fees

54

353

Loss on fixed asset disposals and inventory scrap

528

225

Other

211

742

Total
$
2,839
$
6,332

The above table does not include $2,374 of CEO transition costs incurred in fiscal 2018, which primarily represents the compensation and benefits for our previous Executive Chairman and CEO, Mr. John A. Kraeutler, throughout fiscal 2018, the period during which we also have the compensation and benefits our

~~current~~

CEO, Mr. Jack Kenny, who began employment at the beginning of fiscal 2018. These CEO transition costs and the restructuring costs set forth in the table above comprise the $8,706 of restructuring costs set forth in the accompanying Consolidated Statement of Operations for fiscal 2018.


Year Ended September 30,	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,338	$	2,228	$	1,693

~~Table of Contents~~

~~Accrued liabilities associated with the restructuring costs noted above are comprised of the following:~~

As of September 30,

2019

2018

Severance, other termination benefits and related costs
$
1,010
$
987

Lease and other contract termination fees

12

33

Other

114

6

Total
$
1,136
$
1,026

~~(4)~~

(10)

~~Inventories~~

~~Inventories are comprised of the following:~~

As of September 30,

2019

2018

Raw materials
$
7,455
$
6,689

Work-in-process

11,504

12,098

Finished goods - instruments

935

1,191

Finished goods - kits and reagents

19,723

22,015

Total
$
39,617
$
41,993

~~(5)~~

Bank Credit Arrangements

~~In anticipation of the acquisition of the business of GenePOC (see Note 2), on May 24, 2019 the~~The Company ~~entered into a credit facility agreement with a commercial bank. The credit facility, which expires in May 2024, makes available to the Company~~maintains a revolving credit facility with a commercial bank in an aggregate principal amount not to exceed ~~$125,000, with outstanding~~$200,000, which expires in October 2026. Outstanding principal amounts ~~bearing~~bear interest at a fluctuating rate tied to, at the Company’s option, either the federal funds rate or LIBOR,

, resulting in an effective interest rate of ~~3.78%~~2.69% and 2.51% on the revolving credit facility induring fiscal ~~2019.~~

~~As of September 30, 2019, two draws have been made on the credit facility, resulting in an outstanding principal balance of $75,824. The proceeds from these draws were used to: (i) repay~~2022 and settle the outstanding principal and interest due on our previously-existing $60,000 five-year term loan, which had an outstanding balance of $50,180 as of September 30, 2018; and (ii) along with cash

~~on-hand,~~

~~fund the GenePOC acquisition closing payment.~~2021, respectively. In light of the ~~recent execution date of the credit facility and~~ interest being determined on a variable rate basis, the fair value of the borrowings under the credit facility at both September 30, ~~2019~~2022 and 2021 approximates the current carrying value reflected in the ~~accompanying~~ Consolidated Balance ~~Sheet, as was also the case~~Sheets of $25,000 and $60,000, respectively, which is consistent with ~~the outstanding term loan balance as of September 30, 2018.~~

a level 2 fair value measurement.

The revolving credit facility is collateralized by the business assets of the Company’s U.S. subsidiaries and requires compliance with financial covenants that limit the amount of debt obligations and require a minimum level of coverage of fixed charges, as defined in the revolving credit facility agreement. As of September 30, ~~2019,~~2022, the Company iswas in compliance with all covenants.

~~In connection with the term loan repayment, the Company also settled the interest rate swap that had been entered into to limit exposure to volatility in the term loan’s LIBOR interest rate~~

~~and which effectively converted the variable interest rate on the term loan to a fixed rate of 2.76%.~~

At the time of settlement, the Company received a cash payment in an amount equal to the $563 then-current fair value of the interest rate swap. Accordingly, there is no balance for the interest rate swap reflected within the accompanying Consolidated Balance Sheet as of September 30, 2019. At September 30, 2018, there was an asset balance of $1,722 related to the interest rate swap. The corresponding fair value amount reflected within a separate component of other comprehensive income in the accompanying Consolidated Statements of Comprehensive Income, as a result of the interest rate swap having been designated as an effective cash flow hedge, is being released ratably into income through March 31, 2021, the interest rate swap’s original term. The interest rate swap balance reflected within

~~accumulated~~

~~other comprehensive income at September 30, 2019 and September 30, 2018 totaled $461 and $1,722, respectively~~

~~- 58 -~~

~~Table of Contents~~

Supplemental Cash Flow Information (Interest Paid)

Cash paid for interest totaled ~~$1,405, $1,487~~$934, $1,348 and ~~$1,605~~$2,690 in fiscal ~~2019, 2018~~2022, 2021 and ~~2017,~~2020, respectively.

~~(6)~~

(11)

Income Taxes

(a)	Earnings before income taxes, and the related ~~provision for~~ income ~~taxes for the years ended September 30, 2019, 2018 and 2017~~tax provision were as follows:


Year Ended September 30,	2022			2021			2020
Domestic	$	(14,012	)	$	11,354		$	9,068
Foreign		68,329			79,097			50,225

Total earnings before income taxes	$	54,317			90,451			59,293

Provision (benefit) for income taxes -
Federal -
Current	$	(460	)	$	4,431		$	1,173
Deferred		(1,125	)		(2,595	)		744
State and local		451			1,163			1,170
Foreign -
Current		13,316			16,305			10,194
Deferred		(324	)		(260	)		(174	)

Total income tax provision	$	11,858		$	19,044		$	13,107

Table of Contents

Year Ended September 30,

2019

2018

2017

Domestic
$
23,954
$
27,787
$
31,885

Foreign

7,603

2,593

4,544

Total earnings before income taxes
$
31,557
$
30,380
$
36,429

Provision (credit) for income taxes -

Federal -

Current
$
5,001
$
6,030
$
11,262

Temporary differences

Fixed asset basis differences and depreciation

288

410

(181
)
Intangible asset basis differences and amortization

(797
)
(4,052
)
(1,158
)
Currently
non-deductible
expenses and reserves

241

1,206

884

Stock-based compensation

(109
)
1,379

(635
)
Net operating loss carryforwards utilized

69

61

1,831

Tax credit carryforwards utilized

—

181

67

Other, net

(169
)
(148
)
99

Subtotal

4,524

5,067

12,169

State and local

834

1,066

1,900

Foreign

1,817

398

803

Total income tax provision
$
7,175
$
6,531
$
14,872

(b)	The following is a reconciliation between the statutory U.S. income tax rate and the effective rate derived by dividing the ~~provision for~~ income ~~taxes~~tax provision by earnings before income taxes:


Year Ended September 30,	2022					2021					2020
Computed income taxes at statutory rate	$	11,407		21.0	%	$	18,995		21.0	%	$	12,452		21.0	%
Increase (decrease) in taxes resulting from -
State and local income taxes		362		0.7			1,204		1.3			773		1.3
Foreign-Derived Intangible Income tax		—		—			(563	)	(0.6	)		(136	)	(0.2	)
Global Intangible Low Taxed Income (“GILTI”) tax		6,924		12.7			8,061		8.9			4,970		8.4
Foreign tax credit		(6,572	)	(12.1	)		(7,802	)	(8.6	)		(4,767	)	(8.0	)
Foreign tax rate differences		(1,679	)	(3.1	)		(869	)	(1.0	)		(534	)	(0.9	)
DOJ LeadCare legal matter accrual		2,100		3.9			—		—			—		—
Uncertain tax position activity		166		0.3			205		0.2			62		0.1
Valuation allowance		(197	)	(0.4	)		729		0.8			229		0.3
Stock-based compensation		825		1.5			(498	)	(0.5	)		41		0.1
Transaction costs		—		—			—		—			548		0.9
Unrepatriated earnings		(1,148	)	(2.1	)		680		0.8			185		0.3
Other, net		(330	)	(0.6	)		(1,098	)	(1.2	)		(716	)	(1.2	)

	$	11,858		21.8	%	$	19,044		21.1	%	$	13,107		22.1	%

The Company’s GILTI and foreign tax credit details were as follows:


Year Ended September 30,	2022			2021			2020
U.S. GILTI inclusion	$	32,971		$	38,384		$	23,666
Resulting permanent tax expense		6,924			8,061			4,970
Offsetting foreign tax credit		(6,572	)		(7,802	)		(4,767	)

(c)	The components of net deferred taxes were as follows:

Year Ended September 30,

2019

2018

2017

Computed income taxes at statutory rate

$

6,627

21.0
%

$
7,443

24.5
%    $
12,750

35.0
%
Increase (decrease) in taxes resulting from -

State and local income taxes

577

1.8

982

3.2

1,093

3.0

U.S. tax law change

—

—

(2,655
)
(8.7
)
—

—

One-time
repatriation tax

—

—

876

2.9

—

—

Foreign-Derived Intangible Income tax

(294
)

(0.9
)

—

—

—

—

Global Intangible Low Taxed Income tax

1,119

3.6

—

—

—

—

Foreign tax credit

(990
)

(3.1
)

(15
)
—

(57
)
(0.2
)
Foreign tax rate differences

46

0.1

(104
)
(0.3
)
(281
)
(0.8
)
Qualified domestic production incentives

—

—

(550
)
(1.8
)
(1,012
)
(2.8
)
Uncertain tax position activity

126

0.4

(62
)
(0.2
)
134

0.4

Goodwill impairment charge

—

—

—

—

2,320

6.4

Valuation allowance

106

0.3

(40 ) (0.1 ) — —
Stock-based compensation

(33
)
(0.1
)
447

1.4

—

—

Other, net

(109
)
(0.4
)
209

0.6

(75
)
(0.2
)

$

7,175

22.7
%
$

6,531

21.5
%
$

14,872

40.8
%


As of September 30,	2022			2021
Deferred tax assets -
Valuation reserves and non-deductible expenses	$	4,274		$	4,939
Stock compensation expense not deductible		2,609			2,276
Net operating loss and tax credit carryforwards		12,108			12,711
Intangible asset basis differences and amortization		1,254			505
Unrepatriated earnings		1,205			—
Other		1,357			1,512

Subtotal		22,807			21,943
Less valuation allowance		(1,427	)		(1,624	)

Deferred tax assets		21,380			20,319

Deferred tax liabilities -
Property, plant and equipment basis differences and depreciation		(5,540	)		(4,778	)
Intangible asset basis differences and amortization		(6,218	)		(7,000	)
Unrepatriated earnings		(922	)		(865	)

Deferred tax liabilities		(12,680	)		(12,643	)

Net deferred tax assets	$	8,700		$	7,676

965

Table of Contents

On December 22, 2017, the United States enacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (the “tax reform act”) and the following effects of the tax reform act are reflected within the consolidated financial statements for the year ended September 30, 2018: (i) a tax benefit of $2,655, primarily from the

~~re-measurement~~

~~of deferred tax assets and liabilities; and (ii) $876 of tax expense for the mandatory U.S. repatriation transition tax. The~~

~~re-measurement~~

~~of deferred tax assets and liabilities reflect~~

~~the realization of temporary differences during fiscal 2018 at a transitional blended federal rate of 24.5%, with the remaining temporary differences being~~

~~re-measured~~

~~at the 21% federal rate.~~

The tax reform act includes the Global Intangible Low Taxed Income tax (“GILTI”), which requires the Company to include in U.S. income certain foreign earnings that do not exceed a 10% return on foreign investment. For the year ended September 30, 2019, the Company’s U.S. GILTI inclusion was $5,328, resulting in a permanent tax expense and a foreign tax credit benefit of $1,119 and $990, respectively. The Company has elected to take the GILTI into account in the year it occurs.

~~(c)~~

~~The components of net deferred tax liabilities were as follows:~~

As of September 30,

2019

2018

Deferred tax assets -

Valuation reserves and
non-deductible
expenses

$

1,253
$
1,473

Stock compensation expense not deductible

2,158

2,033

Net operating loss and tax credit carryforwards

494

433

Basis difference in equity-method investee

302

302

Inventory basis differences

289

383

Other

125

(530
)

Subtotal

4,621

4,094

Less valuation allowance

(408
)
(302
)

Deferred tax assets

4,213

3,792

Deferred tax liabilities -

Fixed asset basis differences and depreciation

(2,205
)
(1,913
)
Intangible asset basis differences and amortization

(4,374
)
(5,518
)

Deferred tax liabilities

(6,579
)
(7,431
)

Net deferred tax liabilities

$

(2,366
) $
(3,639
)

For income tax purposes, we have recorded deferred tax assets related to operating loss and tax credit carryforwards of

$12,108

in ~~both~~foreign jurisdictions as of September 30, 2022, reduced by valuation reserves totaling

$1,125.

At September 30, 2021, such deferred tax assets totaled

$179 and $12,532

in U.S. and foreign jurisdictions, ~~totaling $231 and $263,~~ respectively, ~~as of September 30, 2019. At September 30, 2018, such deferred tax assets totaled $303 and $130, respectively. The operating loss carryforwards in~~reduced by valuation reserves totaling

~~Canada expire in 2039, with such carryforwards in the other~~

$1,322.

~~foreign jurisdictions hav~~

~~ing~~

~~no expiration date.~~ The operating loss carryforwards in foreign jurisdictions, the ~~U.S. expire~~

~~2023 at the federal level, and~~

~~2036 at the state level.~~majority of which relate to Israel, have no expiration date. The aggregate amount of ~~federal, state and~~ foreign operating loss carryforwards totaled ~~$366, $2,443 and $914, respectively,~~ approximately

$87,000

at September 30, ~~2019. The use of the federal and state losses is limited by the change of ownership provisions of the Internal Revenue Code~~2022

The Company has recognized a net deferred tax asset

of $

283

and a

net

deferred tax liability of $

865

at September 30, 2022 and 2021, respectively, related to unrepatriated foreign earnings.

The realization of deferred tax assets is dependent upon the generation of future taxable income in the applicable jurisdictions. We have considered the levels of currently anticipated

pre-tax

income in U.S. and foreign jurisdictions in assessing the required level of the deferred tax asset valuation allowance including the characterization of the income as ordinary or capital. Taking into consideration historical and current operating results, and other factors, we believe that it is more likely than not that the net deferred tax asset of ~~$4,213~~$21,380 will be realized. The amount of the net deferred tax asset considered realizable, however, could be reduced in future years if estimates of future taxable income are ~~reduced~~

.reduced.

~~- 60 -~~

~~Table of Contents~~

We utilize a comprehensive model for the recognition, measurement, presentation and disclosure of uncertain tax positions, assuming full knowledge of all relevant facts by the applicable tax authorities. The total amount of unrecognized tax benefits at September 30,

~~, 2019~~

2022 and ~~September 30~~

~~, 2018~~

2021 related to such positions was ~~$383~~$774 and ~~$262,~~$700, respectively, of which ~~$309~~$700 at September 30, 2022 would favorably impact the effective tax rate if recognized. We generally recognize interest and penalties related to uncertain tax positions as a component of our income tax provision. During fiscal ~~2019~~

2022 and ~~2018~~

,2021, such penalties and interest totaled approximately ~~$34~~$24 and ~~$84,~~$31, respectively. We had approximately ~~$128~~$194 accrued for the payment of interest and penalties at September 30,

~~, 2019~~

2022, compared to ~~$162~~$170 accrued at September 30,

~~, 2018~~

. 2021. The amount of our liability for uncertain tax positions expected to be paid or settled in the next 12

months is uncertain.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

2019

2018

Unrecognized income tax benefits
at
beginning of year

$
262
$
517

Additions for tax positions of prior years

83

—

Reductions for tax positions of prior years

(100
)
—

Additions for tax positions of current year

138

—

Tax examination and other settlements

—

(161
)
Expiration of statute of limitations

—

(94
)

Unrecognized income tax benefits at end of year

$
383
$
262


Year Ended September 30,	2022			2021			2020
Unrecognized income tax benefits at beginning of year	$	700		$	568		$	509
Additions for tax positions of prior years		—			34			—
Reductions for tax positions of prior years		—			—			—
Additions for tax positions of current year		138			138			104
Tax examination and other settlements		(64	)		(40	)		(45	)

Unrecognized income tax benefits at end of year	$	774		$	700		$	568

We are subject to examination by the tax authorities in the U.S. (both federal and state) and the countries of Australia,

Belgium, Canada, China, England, France, Germany, Holland, Israel and Italy. In the U.S., ~~open~~ tax years ~~are~~subsequent to fiscal

~~2016, fiscal 2017 and fiscal 2018.~~ 2018 remain open. In countries outside the U.S., open tax years generally range from fiscal ~~2014~~2017 and forward. However, in

Australia and Belgium, the utilization

of local net operating loss carryforwards extends the statute of limitations for examination well into the foreseeable future. To the extent that adjustments result from the completion of these examinations or the lapsing of statutes of limitation, they will affect tax liabilities in the period known. We believe that the results of any tax authority examinations would not have a significant adverse impact on our consolidated financial condition or results of operations.

Supplemental Consolidated Cash Flow Information (Income Taxes Paid)

Cash paid for income taxes totaled ~~$7,840, $6,555~~$26,824, $27,466 and ~~$12,613~~$9,816 in fiscal ~~2019, 2018~~2022, 2021 and ~~2017, respectively~~2020, respectively.

Table of Contents

~~(7)~~

(12)

Employee Benefits

(a)

Savings and Investment Plan

- We have a profit sharing and retirement savings plan covering substantially all full-time U.S. employees. Profit sharing contributions to the plan, which are discretionary, are approved by the board of directors. The plan permits participants to contribute to the plan through salary reduction. Under terms of the plan, we match 100% of an employee’s contributions, up to a maximum match of 4% of eligible ~~compensation (3% through December 31, 2016).~~compensation. Our discretionary and matching contributions to the plan, which are recorded primarily within operating expenses, amounted to approximately ~~$1,979, $2,118~~$2,727, $2,869 and ~~$1,912, during fiscal 2019, 2018~~$2,434, for the years ended September 30, 2022, 2021 and ~~2017,~~2020, respectively.

(b)

Stock-Based Compensation Plans

- During fiscal ~~2019, we~~2022, the Company had 2two active stock-based compensation plans, ~~the 2004 Equity Compensation Plan, which became effective December 7, 2004, as amended (the “2004 Plan”) and~~ the 2012 Stock Incentive Plan, which became effective January 25, 2012 (the “2012 Plan”) and the 2021 Omnibus Award Plan, which became effective January 27, 2021 (the “2021 Plan”).

~~Each of the 2004~~The 2021 Plan ~~and 2012 Plan~~is authorized ~~the granting of~~to grant new shares for options, restricted shares or restricted share units for up to ~~3,000~~2,839 shares, ~~with~~including 1,839 non-granted shares from the

~~non-granted~~

~~portion of the 2004~~ 2012 Plan permitted to be carried forward and added to the ~~2012~~2021 Plan authorized limit. As

Considering grants, cancellation and forfeitures that have occurred during the year, as

of September 30, ~~2019, we have granted 1,292 and 2,051 shares under~~ 2022,

the ~~2004 Plan and 2012 Plan, respectively, thereby resulting in a~~

remaining authorized limit ~~of 2,657~~

under the 2021 Plan totals approximately

2,200 shares. Options may be granted at exercise prices not less than 100% of the closing market value of the underlying common shares on the date of grant and have maximum terms up to ten years. Vesting schedules for options, restricted shares and restricted share units are established at the time of grant and may be set based on future service periods, achievement of performance targets, or a combination thereof. All options contain provisions restricting their transferability and limiting their exercise in the event of termination of employment, or the disability or death of the optionee. We recognize compensation expense for all share-based payments made to employees, based upon the fair value of the share-based payment on the date of the grant.

~~Table of Contents~~

During fiscal years ~~2017~~2020 through ~~2019,~~2022, we granted, in the aggregate for the three-year period, approximately ~~1,100~~875 restricted share units (with weighted-average grant date fair values of ~~$16.93~~$10.13 per share in fiscal ~~2017, $14.65~~2020, $18.81 per share in fiscal ~~2018~~2021 and ~~$18.66~~

$20.50 per share in fiscal ~~2019)~~2022) to certain ~~employees.~~employees, including CEO Jack Kenny, as separately detailed below. The units granted in fiscal ~~2019~~2022 were generally time-vested restricted share units vesting in total on the fourth anniversary of the grant date, while units granted in fiscal 2021 and 2020 were generally time-vested restricted share units vesting in total on the third anniversary of the grant date. ~~During~~

Additionally, during fiscal ~~2018 and 2017, generally half of each employee’s grant was time-vested~~2022, we granted approximately 105 restricted share units ~~vesting~~(with a weighted-average grant date fair value of $19.54 per share) to certain employees, including

Mr.

Kenny to incentivize the achievement of certain Company and segment net revenues and operating targets in ~~total on the fourth anniversary~~fiscal 2024. These awards can only be earned if specified net revenues and operating income thresholds are achieved during fiscal 2024, with increased amounts available to be earned as established increased levels are achieved, which range from 50% to 200% of the ~~grant date, with~~“targeted” payout. Based upon information available as September 30, 2022, it is estimated that these performance-based restricted stock units will be paid out at the ~~remaining half being subject to attainment of a specified earnings~~ target ~~for each fiscal period. While dividend equivalents were paid on these units throughout each fiscal period, the targets for each fiscal period were not met~~level, and the ~~performance-based portion of these restricted share units granted have been cancelled.~~

associated stock compensation expense is being recorded ratably through September 30, 2024. Such expense totaled approximately $510 during fiscal 2022.

During fiscal ~~2017~~2020, in connection with ~~his~~Mr. Kenny’s Amended and Restated Employment Agreement, ~~we also granted to our former Chairman and CEO~~

at that time, Mr. John A. Kraeutler, 25 restricted share units (with a grant date fair value of $19.09 per share), with each respective grant to be earned only if specified revenue and earnings per share targets were achieved for fiscal 2017. As a result of the performance targets not being achieved, these restricted share units have been cancelled

~~Additionally, during fiscal 2018 in connection with the~~effective October ~~9, 2017 employment of the Company’s current CEO~~

~~, Mr. Jack Kenny,~~1, 2019, we granted to Mr. Kenny: (i) options to purchase ~~100~~approximately 198 shares of common stock of the Company (with a grant date fair value of ~~$3.19~~$3.38 per share) vesting on a pro rata basis over ~~four years;~~the three years ending October 1, 2022; and (ii) 13approximately 100 restricted share units (with a grant date fair value of ~~$14.50~~$10.10 per share) vesting 100% on the ~~second anniversary of~~October 1, 2022, which are included within the ~~grant. Also during fiscal 2018 in connection with his Amended and Restated Employment Agreement, we granted to our~~

~~former Chairman and CEO~~

~~at that time, Mr. John A. Kraeutler, 25~~ restricted share units (with a grant date fair value of $15.30 per share) to be earned only if specified revenue and earnings per share targets were achieved for fiscal 2018. As a result of the fiscal 2018 performance targets related to this grant being achieved, these restricted share units were fully vested and the related shares were paid to Mr. Kraeutler in November 2018.noted above.

Giving effect to these grants, cancellations and certain other activities for restricted shares and restricted share units throughout the years, including conversions to common shares, forfeitures, and new hire and employee promotion grants, approximately ~~432~~790 restricted share units remain outstanding as of September 30, ~~2019,~~2022, with a weighted-average grant date fair value of ~~$17.17~~$15.93 per share, a weighted-average remaining vesting period of ~~1.53~~1.08 years and an aggregate intrinsic value of ~~$4,096.~~$24,898. The weighted-average grant date fair value of the approximate ~~285~~306 restricted share units that vested during fiscal ~~2019~~2022 was $17.34 per share.

Table of Contents

The amount of stock-based compensation expense ~~reported~~ was ~~$3,251, $3,402~~$6,900, $4,156 and ~~$3,381 in fiscal 2019, 2018~~$3,802 for the years ended September 30, 2022, 2021 and ~~2017,~~2020, respectively. The fiscal ~~2019~~2022 expense is comprised of ~~$542~~$1,414 related to stock options and ~~$2,709~~$5,486 related to restricted share units; the fiscal ~~2018~~2021 expense is comprised of ~~$793~~$1,080 related to stock options and ~~$2,609~~$3,076 related to restricted share ~~units;~~units ; and the fiscal ~~2017~~2020 expense is comprised of ~~$662~~$1,006 related to stock options and ~~$2,719~~$2,796 related to restricted share units. The total income tax benefit recognized in the ~~income statement~~Consolidated Statements of Operations for these stock-based compensation arrangements was ~~$572, $303~~$1,638, $1,516 and ~~$861,~~$898, for ~~fiscal 2019, 2018~~the years ended September 30, 2022, 2021 and ~~2017,~~2020, respectively. As of September 30, ~~2019,~~2022, we expect future stock compensation expense for unvested options and unvested restricted share units to total ~~$240~~$905 and ~~$2,756,~~$5,821, respectively, which will be recognized during fiscal years ~~2020~~2023 through ~~2023.~~2026.

We recognize stock-based compensation expense only for the portion of shares that we expect to vest. As such, we apply estimated forfeiture rates to our stock-based compensation expense calculations. These rates have been derived using historical forfeiture data, stratified by several employee ~~groups.~~groups, and range from 0% to 16% in each of the years ended September 30, 2022, 2021 and 2020. During ~~fiscal 2019, 2018~~the years ended September 30, 2022, 2021 and ~~2017,~~2020, we recorded ~~$127, $106~~$192, $183 and ~~$106,~~$148, respectively, in ~~stock~~stock-based compensation expense to adjust estimated forfeiture rates to ~~actual, noting that total fiscal 2019 stock compensation expense reflects the effect of terminations made in connection with the restructuring activities discussed in Note 3.~~actual.

We have elected to use the Black-Scholes option pricing model to determine grant-date fair value for stock options, with the following assumptions: (i) expected share price volatility based on the average of Meridian’s historical volatility over the options’ expected lives and implied volatility based on the value of tradable call options; (ii) expected life of options based on contractual lives, employees’ historical exercise behavior and employees’ historical post-vesting employment termination behavior; (iii) risk-free interest rates based on treasury rates that correspond to the expected lives of the options; and (iv) dividend yield based on the expected yield on underlying Meridian common stock.

A summary of these key assumptions are as follows:

~~- 6~~

~~Table of Contents~~

Year ended September 30,

2019

2018

2017

Risk-free interest rates

2.99
%
2.10
%
1.34
%
Dividend yield

3.3
%
3.3
%
4.1
%
Life of option

6.51 yrs.

6.47 yrs.

6.44 yrs.

Share price volatility

29
%
30
%
27
%
Forfeitures (by employee group)

0%-16
%

0%-16
%
0%-19
%


Year ended September 30,	2022		2021			2020
Share price volatility		51%-59%		53%-59	%		34	%
Life of option		4.00-7.06 yrs.		4.00-7.47 yrs.			6.51 yrs.
Risk-free interest rates		0.95%-1.73%		0.26%-0.79	%		1.60	%
Dividend yield		0%		0	%		0	%

A summary of the status of our stock option plans as of September 30, ~~201~~

,2022, and changes during the year ended September 30, ~~2019,~~2022, is presented in the table and narrative below:

Options

Wtd Avg
Exercise
Price

Wtd Avg
Remaining
Life (Yrs)

Aggregate
Intrinsic
Value

Outstanding beginning of period

1,095
$
17.56

Grants

77

16.07

Exercises

(30
)
15.13

Forfeitures

(52
)
15.03

Cancellations

(100
)
20.48

Outstanding end of period

990
$
17.36

6.37
$
1

Exercisable end of period

782
$
17.99

5.86
$
—


	Options			Wtd Avg Exercise Price		Wtd Avg Remaining Life (Yrs)		Aggregate Intrinsic Value
Outstanding beginning of period		1,001		$	15.31
Grants		163			19.52
Exercises		(186	)		13.27
Forfeitures		—			—
Cancellations		(9	)		20.26

Outstanding end of period		969		$	16.55		6.19	$	14,515

Exercisable end of period		612		$	16.62		4.97	$	9,124

Table of Contents

A summary of the status of our nonvested options as of September 30, ~~2019,~~2022, and changes during the year ended September 30, ~~201~~

,2022, is presented below:

Options

Weighted-
Average
Grant Date
Fair Value

Nonvested beginning of period

389
$
3.24

Granted

77

3.61

Vested

(205
)
3.39

Forfeitures

(52
)
3.25

Nonvested end of period

209
$
3.24


	Options			Weighted- Average Grant Date Fair Value
Nonvested beginning of period		403		$	5.70
Granted		163			9.26
Vested		(209	)		5.73
Forfeitures		—			—

Nonvested end of period		357		$	7.30

~~The~~For the years ended September 30, 2022, 2021 and 2020: (i) the weighted average grant-date fair value of options granted was ~~$3.61, $3.27~~$9.26, $9.18 and ~~$2.65 for fiscal 2019, 2018 and 2017, respectively. The~~$3.54, respectively; (ii) the total intrinsic value of options exercised was ~~$62, $2~~$3,032, $2,890 and ~~$9 for fiscal 2019, 2018~~$1,585, respectively; and ~~2017, respectively. The~~(iii) the total grant-date fair value of options that vested ~~during fiscal 2019, 2018~~was $1,187, $621 and ~~2017 was $735, $580 and $494,~~$528, respectively.

Cash received from options exercised was ~~$443, $183~~$2,450, $3,052 and ~~$302~~$3,559 for ~~fiscal 2019, 2018~~the years ended September 30, 2022, 2021 and ~~2017,~~2020, respectively. ~~Tax expense recorded to additional~~

~~paid-in~~

~~capital from option exercises totaled $0, $0~~

(13)	Contingent Obligations and Non-Current Liabilities

~~and $~~

~~431~~

~~for fiscal~~

~~2019~~

~~2018~~

~~and~~

~~2017~~

~~, respectively.~~

In connection with ~~Mr. Kenny’s October 1, 2019 Amended and Restated Employment Agreement,~~the acquisition of Exalenz Bioscience Ltd. (“Exalenz”) in ~~November 2019 we granted Mr. Kenny: (i) options to purchase 198 shares of common stock~~fiscal 2020, the Company assumed several Israeli government grant obligations. The repayment of the ~~Company vesting~~grants, along with interest incurred at varying stated fixed rates based on ~~a pro rata basis over~~LIBOR at the ~~three years ending October 1, 2022;~~time each grant was received, is not dictated by an established repayment schedule. Rather, the grants and ~~(ii) 99 restricted share units vesting 100% on October 1, 2022.~~related interest are required to be repaid using 3% of the net revenues generated from the sales of BreathID products, with the timing of repayment contingent upon the level and timing of such revenues. In addition, the grants have no collateral or financial covenant provisions generally associated with traditional borrowing instruments. These obligation amounts total $5,287 and $5,814 as of September 30, 2022 and 2021, with the grant obligations remaining at September 30, 2022 bearing interest at rates ranging from 0.58% to 2.02%.

The grant obligations are reflected in the Consolidated Balance Sheets as follows:


Year Ended September 30,	2022		2021
Current liabilities	$	667	$	638
Non-current liabilities		4,620		5,176

~~Table of Contents~~

~~(8)~~

~~Non-Current Liabilities~~

~~The~~Additionally, the Company has provided certain post-employment benefits to its former ~~CEO,~~Chief Executive Officer, and these obligations total ~~$1,917~~$1,284 and ~~$1,864~~$1,676 at September 30, ~~2019~~2022 and ~~2018,~~2021, respectively. In addition, ~~we are~~the Company is required by the governments of certain foreign countries in which we operate to maintain a level of ~~reserves~~accruals for potential future severance indemnity. These ~~reserves~~accruals total ~~$702~~$566 and ~~$713~~$754 at September 30, ~~2019~~2022 and ~~2018,~~2021, respectively.

~~(9)~~

(14)

National Institutes of Health Contracts

In December 2020, the Company entered into a sub-award grant contract with the University of Massachusetts Medical School as part of the National Institutes of Health Rapid Acceleration of Diagnostics (“RADx”) initiative to support the Company’s research and development of its diagnostic test for the SARS-CoV-2 antigen. The Company has received $1,000 under the grant contract for reimbursement of eligible research and development expenditures. These amounts ar

included within other expense

, net

in the Consolidated Statement of Operations for the year ended September 30, 2021.

Table of Contents

On January 25, 2022, the Company entered into a contract to amend the Company’s second grant contract under the RADx initiative, which was originally effective February 1, 2021. The purpose of the grant is to support the Company’s manufacturing production scale-up and expansion to meet the demand for COVID-19 testing, as well as the Company’s Revogene respiratory panel. The amended contract is a 24-month service contract through January 2023, with payment of up to $8,000 being made based on the Company achieving key milestones related to increasing its capacity to produce COVID-19 tests and the Revogene respiratory panel. As of September 30, 2022, $2,750 has been received related to this contract and is reflected as a reduction in the cost of building and improvements on the Consolidated Balance Sheet, in accordance with applicable accounting guidance.

(15)	Reportable Segments and Major Concentration Data

The Company’s reportable segments maintain separate financial information for which results of operations are evaluated on a regular basis by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company records the direct costs of business operations to the reportable segments, including allocations for certain corporate-wide costs such as treasury management, human resources and technology, among others. Corporate provides certain executive management and administrative services to each reportable segment. These services primarily include executive oversight by non-segment-specific executives, including the Board of Directors, along with certain other corporate-wide support functions such as insurance, legal and business development. The Company generally does not allocate these types of corporate expenses to the reportable segments.

~~Our reportable segments are Diagnostics~~

Reportable segment and Life Science. The Diagnostics segment consists of manufacturing operations for infectious disease products in Cincinnati, Ohio and Quebec City, Canada, manufacturing operations for products detecting elevated lead levels in blood in Billerica, Massachusetts (near Boston), and the sale and distribution of diagnostics products domestically and abroad. The Life Science segment consists of manufacturing operations in Memphis, Tennessee; Boca Raton, Florida; London, England; and Luckenwalde, Germany, and the sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides,

~~and bioresearch reagents domestically and abroad, including a sales and business development facility in Beijing, China to further pursue growing revenue opportunities in Asia~~

.corporate information is as follows:

~~Revenues from individual customers constituting~~

~~% or more of consolidated net revenues are as follows:~~

Year Ended September 30,

2019

2018

2017

Customer A
$
18,096

(9
)% $
21,162

(10
)%

$
22,397

(11
)%
Customer B
$
17,350

(9
)% $
22,490

(11
)% $
17,825

(9
)%


	Diagnostics			Life Science		Corporate (1)			Eliminations (2)			Total
Fiscal 2022
Net revenues -
Third-party	$	155,903		$	177,115	$	—		$	—		$	333,018
Inter-segment		255			138		—			(393	)		—
Operating income (loss)		2,982			86,040		(34,707	)		76			54,391
Depreciation and amortization		14,708			1,803		—			—			16,511
Capital expenditures		6,882			1,733		—			—			8,615
Goodwill		94,412			21,890		—			—			116,302
Other intangible assets, net		74,129			2		—			—			74,131
Total assets		357,630			105,511		—			(44	)		463,097

Fiscal 2021
Net revenues -
Third-party	$	127,760		$	190,136	$	—		$	—		$	317,896
Inter-segment		351			207		—			(558	)		—
Operating income (loss)		(7,280	)		115,014		(14,788	)		88			93,034
Depreciation and amortization		13,432			1,854		—			—			15,286
Capital expenditures		15,827			2,485		—			—			18,312
Goodwill		94,904			19,764		—			—			114,668
Other intangible assets, net		84,149			2		—			—			84,151
Total assets		339,208			110,536		—			(22	)		449,722

Accounts receivable from these 2 Diagnostics customers accounted for 13% and 12% of consolidated accounts receivable at September 30, 2019 and September 30, 2018, respectively. The Company’s international revenues totaled approximately $76,430, $72,548 and $66,682 in fiscal 2019, 2018 and 2017, respectively, and our three major product families – gastrointestinal, respiratory illnesses and blood chemistry – accounted for 57%, 59% and 60% of consolidated net revenues in fiscal 2019, 2018 and 2017, respectively. We currently purchase on a sole-source basis from a U.S. manufacturer the instruments on which our Alethia molecular testing platform operates. Additionally, two of our foodborne products sourced from another vendor accounted for 9%, 9% and 10% of third-party revenues for our Diagnostics segment in fiscal 2019, 2018 and 2017, respectively.

Significant revenue information by country for the Diagnostics and Life Science segments is as follows. Revenues are attributed to the geographic area based on the location to which the product is delivered.


Fiscal 2020
Net revenues -
Third-party	$	121,132	$	132,535	$	—		$	—		$	253,667
Inter-segment		326		261		—			(587	)		—
Operating income (loss)		5,276		68,893		(12,895	)		50			61,324
Depreciation and amortization		11,451		2,116		—			—			13,567
Capital expenditures		1,850		1,449		—			—			3,299
Goodwill		94,855		19,331		—			—			114,186
Other intangible assets, net		83,179		18		—			—			83,197
Total assets		306,812		98,483		—			(34	)		405,261

Year Ended September 30,

2019

2018

2017

United States

$

105,648
$
120,555
$
114,494

Italy

10,898

10,398

9,004

France

2,442

2,353

1,845

United Kingdom

2,397

2,340

1,778

Puerto Rico

2,276

1,054

730

Japan

1,571

1,307

2,421

Belgium

1,465

1,711

1,507

Holland

1,411

1,454

1,290

Other countries

8,574

9,282

10,452

Total Diagnostics

$

136,682
$
150,454
$
143,521

(1)	Includes acquisition and transaction related costs, litigation and select legal costs and restructuring costs totaling $20,298, $2,803 and $2,080 for the years ended September 30, 2022, 2021 and 2020, respectively

.(2)	Eliminations consist of inter-segment transactions.

- 70 -

Table of Contents

Year Ended September 30,

2019

2018

2017

United States

$

18,936

$

20,468

$

19,595

Germany

12,664

8,108

7,406

China

8,460

8,347

5,898

United Kingdom

4,714

5,201

5,579

Spain

4,415

4,187

3,209

Australia

3,461

3,631

4,002

France

2,200

2,040

1,792

Japan

1,624

1,932

1,375

Italy

1,357

971

700

South Korea

1,134

2,044

2,308

Other countries

5,367

6,188

5,386

Total Life Science

$
64,332
$
63,117

$

57,250

~~In locations outside the U.S., the Company’s identifiable assets were concentrated as follows at the end of most recent fiscal years:~~

~~As of September 30, 2019~~

~~: U.K – $22,963~~

~~; Germany – $~~

~~7,141~~

~~; Italy – $~~

~~7,557~~

~~; and Australia – $~~

~~1,392~~

~~As of September 30, 2018~~

~~: U.K – $14,816; Germany – $7,706; Italy – $7,334; and Australia – $3,543~~

~~Segment information for the interim periods is as follows:~~

Diagnostics

Life Science

Corporate
(1)

Eliminations
(2)

Total

Fiscal 2019

Net revenues -

Third-party
$
136,682
$
64,332
$
—
$

—
$
201,014

Inter-segment

462

361

—

(823
)
—

Operating income

22,399

20,572

(10,373
)
101

32,699

Depreciation and amortization

7,676

2,288

—

—

9,964

Capital expenditures

2,049

1,748

—

—

3,797

Goodwill

70,395

18,846

—

—

89,241

Other intangible assets, net

59,807

436

—

—

60,243

Total assets

255,169

70,392

—

(83
)
325,478

Fiscal 2018

Net revenues -

Third-party
$
150,454
$
63,117
$
—
$
—
$
213,571

Inter-segment

392

397

—

(789
)
—

Operating income

32,569

13,799

(15,076
)
292

31,584

Depreciation and amortization

6,557

2,131

—

—

8,688

Capital expenditures

2,477

1,724

—

—

4,201

Goodwill

35,213

19,424

—

—

54,637

Other intangible assets, net

22,068

1,045

—

—

23,113

Total assets

180,978

70,341

—

58

251,377

~~Table of Contents~~

Fiscal 2017

Net revenues -

Third-party
$
143,521
$
57,250
$
—
$
—
$
200,771

Inter-segment

389

537

—

(926
)
—

Operating income

34,124

14,086

(11,097
)

269

37,382

Depreciation and amortization

7,037

2,053

—

—

9,090

Capital expenditures

2,554

1,913

—

—

4,467

Goodwill

35,213

19,713

—

—

54,926

Other intangible assets, net

24,973

1,731

—

—

26,704

Total assets

180,226

69,938

—

(387
)
249,777

~~(1)~~

~~Includes Restructuring and Selected Legal~~

~~Costs of $2,596, $7,779 and $762 in fiscal years 2019, 2018 and 2017, respectively.~~

~~(2)~~

~~Eliminations consist of inter-segment transactions.~~

A reconciliation of reportable segment operating

income

to consolidated earnings before income taxes ~~for the years ended September 30, 2019, 2018 and 2017~~ is as follows:

Year Ended September 30,

2019

2018

2017

Segment operating income
$
43,072
$
46,660
$
48,479

Corporate expenses

(10,373
)

(15,076
)
(11,097
)
Interest income

681

418

171

Interest expense

(1,945
)
(1,520
)
(1,642
)
Other, net

122

(102
)
518

Consolidated earnings before income taxes
$
31,557
$
30,380
$
36,429


Year Ended September 30,	2022			2021			2020
Operating income (loss):
Diagnostics segment	$	2,982		$	(7,280	)	$	5,276
Life Science segment		86,040			115,014			68,893
Eliminations		76			88			50

Total reportable segment operating income		89,098			107,822			74,219
Corporate operating expenses		(34,707	)		(14,788	)		(12,895	)
Interest income		17			—			142
Interest expense		(1,189	)		(1,878	)		(2,632	)
RADx initiative grant income		—			1,000			—
Other, net		1,098			(1,705	)		459

Consolidated earnings before income taxes	$	54,317		$	90,451		$	59,293

Transactions between reportable segments are accounted for at established intercompany prices for internal and management purposes with all intercompany amounts eliminated in consolidation.

Net revenues generated by the Company’s three major Diagnostics segment product families – gastrointestinal, respiratory illnesses and blood chemistry – accounted for 39%, 32% and 39% of consolidated net revenues during the years ended September 30, 2022, 2021 and 2020, respectively.

While no individual Diagnostics or Life Science segment customers accounted for greater than 10% of consolidated net revenues during the years ended September 30, 2022, 2021 and 2020, individual Diagnostics or Life Science segment customers, including their affiliates, comprising 10% or more of reportable segment net revenues were as follows:


Year Ended September 30,	2022			2021			2020
Diagnostics
Customer A		8	%		10	%		12	%
Customer B		10	%		11	%		13	%
Customer C		11	%		12	%		7	%

Life Science
Customer D		3	%		3	%		13	%
Customer E		10	%		13	%		11	%
Customer F		18	%		4	%		—	%

Table of Contents

In addition, for the years ended September 30, 2022, 2021 and 2020, the Life Science segment’s ten largest customers, including their affiliates, accounted for approximately 56%, 44% and 48%, respectively, of Life Science segment net revenues, and 30%, 27% and 25%, respectively, of consolidated net revenues.

One Diagnostics segment customer (Customer B above) and one Life Science segment customer (not listed above) accounted for approximately 12% and 11%, respectively, of consolidated accounts receivable as of September 30, 2022. As of September 30, 2021,

ne Diagnostics segment customer (Customer B above) and one Life Science segment customer (Customer E above) accounted for approximately 12% and 10%, respectively, of consolidated accounts receivable.

Net revenues generated by the Company outside of the U.S. and its territories totaled $170,467, $173,475 and $121,596 for the years ended September 30, 2022, 2021 and 2020, respectively, with net revenues by country for the Diagnostics and Life Science segments as follows (net revenues are attributed to the geographic area based on the location to which the product is delivered):


Year Ended September 30,	2022		2021		2020
U.S. and territories	$	130,101	$	99,636	$	95,382
Italy		9,741		12,240		9,797
United Kingdom		3,972		2,197		2,312
Belgium		1,339		1,554		1,440
Holland		1,051		1,279		1,183
Other countries		9,699		10,854		11,018

Total Diagnostics	$	155,903	$	127,760	$	121,132


Year Ended September 30,	2022		2021		2020
South Korea	$	33,642	$	9,242	$	1,908
U.S. and territories		32,450		44,785		36,689
Germany		17,969		18,460		14,190
China		15,368		13,559		19,047
United Kingdom		12,882		13,097		14,765
France		11,948		10,733		5,579
Spain		11,134		12,593		7,242
Finland		10,317		17,936		2,518
Turkey		7,858		7,281		2,819
Japan		6,591		6,532		3,707
Australia		4,312		9,115		5,957
Italy		3,735		7,516		4,067
Czech Republic		1,926		922		601
India		1,257		5,558		2,099
Switzerland		1,119		632		758
Other countries		4,607		12,175		10,589

Total Life Science	$	177,115	$	190,136	$	132,535

Table of Contents

In locations outside the U.S., the Company’s identifiable assets were concentrated as follows at the end of the most recent fiscal years, with no additional country’s total of assets exceeding $5,000:


As of September 30,	2022		2021
Israel	$	71,536	$	80,416
United Kingdom		27,927		30,027
Germany		16,734		22,293
Canada		15,875		15,236
Italy		7,225		6,921

~~(10)~~

(16)

Commitments and ~~Contingencies~~Contingent Obligations

(a)

Royalty Commitments

We have entered into various license agreements that require payment of royalties based on a specified percentage of net revenues from licensed products, with such percentages generally ranging from approximately 3% to 10%. During the ~~sales~~year ended September 30, 2022, royalty expense associated with these agreements totaled approximately $2,300, with 40% and 60% of ~~licensed products. Approximately 84% of our royalty expenses relate~~such expense relating to our Diagnostics ~~operating segment, where the royalty rates range from 3% to 8%.~~and Life Science segments, respectively. These royalty expenses are recognized ~~on an~~

~~as-earned~~

~~basis~~as the related revenues are earned and are recorded ~~in the year earned~~ as a component of cost of sales. Annual royalty expenses associated with these agreements ~~were~~totaled approximately ~~$2,107, $2,579~~$5,200 and ~~$2,600~~$1,900 for the ~~fiscal~~ years ended September 30, ~~2019, 2018~~2021 and ~~2017,~~2020, respectively, with the Diagnostics/Life Science segment split of such net revenues equating to approximately 25/75 and 80/20 in each of these years, respectively.

(b)

Purchase Commitments

Excluding the operating lease commitments reflected in Note ~~10(c) below,~~9, we have purchase commitments primarily for ~~inventory~~inventories and service items as part of the normal course of business. Commitments made under these obligations are ~~$14,203~~$40,182 for fiscal ~~2020~~2023 and ~~$792~~$1,109 for fiscal ~~2021~~2024 through fiscal ~~202~~

~~. NaN~~2026. No purchase commitments have been made beyond fiscal ~~202~~

32026.

(c)

~~Operating Lease Commitments~~

Litigation

Meridian and its subsidiaries are parties to a number of operating lease agreements around the world, the majority of which relate to office and warehouse building leases expiring at various dates. Amounts charged to expense under operating leases were $2,372, $2,457 and $2,140 for fiscal 2019, 2018 and 2017, respectively. Operating lease commitments for each of the five succeeding fiscal years are as follows: fiscal 2020 - ~~$1,528; fiscal 2021 - $1,451; fiscal 2022 - $1,293; fiscal 2023 - $967; and fiscal 2024 - $712.~~

~~Table of Contents~~

~~(d)~~

~~Acquisition Price Holdback and Contingent Consideration -~~

Pursuant to the purchase agreement related to the June 3, 2019 acquisition of the business of GenePOC, Meridian’s maximum remaining consideration to be paid totals $75,000. As detailed in Note 2, this amount is comprised of: (i) a $5,000 purchase price holdback; and (ii) up to $70,000 of payments contingent upon the achievement of certain product development milestones and financial performance targets, the preliminary valuation of which totals approximately $27,200 as of September 30, 2019.

~~(e)~~

~~Litigation -~~

We are a party to various litigation matters from time to time that we believe are in the normal course of business. The ultimate resolution of these routine matters is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows. Additionally, the Company has also become a party to certain legal matters that are ~~somewhat~~ outside the normal course of business. See ~~Item 3. “Legal Proceedings”~~Note 5 for a discussion of ~~the status of these selected~~Magellan’s DOJ LeadCare legal ~~matters.~~matter.

~~(f)~~

(d)

Indemnifications -

- In conjunction with certain contracts and agreements, we provide routine indemnifications related to our performance obligations. The terms of these indemnifications range in duration and in some circumstances are not explicitly defined. The maximum obligation under some such indemnifications is not explicitly stated and, as a result of our having no history of paying such indemnifications, cannot be reasonably estimated. We have 0tnot made any payments for these indemnifications and 0no liability is recorded at September 30, ~~2019~~2022 or ~~September 30, 2018.~~2021.

~~(11)~~

(17)

~~Quarterly Financial Data (Unaudited)~~

Pending Merger

~~The sum~~

On July 7, 2022, the Company entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”) with SD Biosensor, Inc., a corporation with limited liability organized under the laws of the ~~earnings per common share may not equal~~Republic of Korea (“SDB”), Columbus Holding Company, a Delaware corporation (“Parent”), and Madeira Acquisition Corp., an Ohio corporation and a direct wholly owned subsidiary of Parent (“Merger Sub”). Meridian is informed that SJL Partners, LLC (“SJL”) is currently the ~~corresponding annual amounts due~~sole shareholder of Parent, and SDB together with SJL will be the sole shareholders of Parent as of the closing of the Merger. Pursuant to ~~interim quarter rounding.~~the Merger Agreement, Merger Sub will merge with and into Meridian (the “Merger”), with Meridian surviving the Merger as a direct wholly owned subsidiary of Parent.

For the Quarter Ended in Fiscal 2019

December 31

March 31

June 30

September 30

Net revenues
$
51,480
$
50,248
$
48,440
$
50,846

Gross profit

31,572

29,338

28,259

29,156

Net earnings

8,106

7,094

5,079

4,103

Basic earnings per common share

0.19

0.17

0.12

0.10

Diluted earnings per common share

0.19

0.17

0.12

0.10

Cash dividends per common share

0.125

0.125

—

—

For the Quarter Ended in Fiscal 2018

December 31

March 31

June 30

September 30

Net revenues
$
52,283
$
56,451
$
51,737
$
53,100

Gross profit

32,010

34,569

31,962

32,156

Net earnings

6,302

5,288

6,825

5,434

Basic earnings per common share

0.15

0.12

0.16

0.13

Diluted earnings per common share

0.15

0.12

0.16

0.13

Cash dividends per common share

0.125

0.125

0.125

0.125

At the effective time of the proposed Merger (the “Effective Time”), each share of common stock, no par value per share, of the Company issued and outstanding as of immediately prior to the Effective Time (other than dissenting shares or shares of the Company’s common stock held by the Company as treasury stock or owned by SDB, Merger Sub or any subsidiary of the Company or SDB) will be cancelled and cease to exist and automatically convert into the right to receive cash in an amount equal to $34.00, without interest.

773

Table of Contents

Consummation of the Merger is subject to customary closing conditions, including, without limitation: (i) the absence of certain legal impediments; and (ii) the condition that no Specified Outcome, as such term is defined in the Merger Agreement, related to the DOJ LeadCare legal matter (which is described in the section entitled “Legal Matter Relating to LeadCare Product Line” of Item 3. “Legal Proceedings”) has occurred or is reasonably likely to occur.

On November 21, 2022, the parties received clearance from the Committee on Foreign Investment in the United States with respect to the Merger and the transactions contemplated by the Merger Agreement.

The Merger Agreement contains certain termination rights for the Company and SDB. In addition to the foregoing termination right, and subject to certain limitations: (i) the Company or SDB may terminate the Merger Agreement if the Merger is not consummated by January 6, 2023; and (ii) the Company and SDB may mutually agree to terminate the Merger Agreement.

The Company incurred transaction related costs of approximately $6,800 during the year ended September 30, 2022 related to the Merger, which is recorded in acquisition and transaction related costs in the Consolidated

Statements of Operations.

(18)	Subsequent Event

On October 26, 2022, Meridian acquired select assets from Estel Biosciences, Inc., as part of Meridian’s continued investment in its immunological research and development capabilities. Among other assets, the Company acquired intellectual property that will be incorporated into the Life Science operations in North Brunswick, New Jersey and Memphis, Tennessee for the design and manufacture of recombinant proteins using an insect cell expression system.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.

CONTROLS AND PROCEDURES

As of September 30, ~~2019,~~2022, an evaluation ~~excluding the internal controls of certain net assets of the business of GenePOC acquired in June 2009,~~ was completed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule

13a-15(b)

and

15d-15(b)

promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of September 30, ~~2019.~~2022. There have been no changes in our internal control over financial reporting identified in connection with the evaluation of internal control that occurred during the fourth fiscal quarter that has materially affected, or is reasonably likely to affect, our internal control over financial reporting, or in other factors that could significantly affect internal control subsequent to September 30, ~~2019.~~2022.

Our internal control report is included in this ~~Annual Report on~~ Form

10-K

after Item 8, under the caption “Management’s Report on Internal Control over Financial Reporting.”

~~ITEM 9B.~~

~~OTHER INFORMATION~~

~~The following information is provided pursuant to Item 5.03 of Form~~

~~8-K.~~

~~Effective November 26, 2019~~

- 74 -

ITEM 9B.

OTHER INFORMATION

Not applicable.

ITEM 9C.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

None.

PART III.

The information required by Items 10, 11, 12, 13 and 14 of Part III will be provided within a separate filing within 120 days of the Company’s ~~Board of Directors adopted an amendment to its Amended and Restated Code of Regulations for the purpose of facilitating virtual meetings of shareholders.~~

The following sentence was added to Article II, Section 3 (Place of Meetings): “The Board of Directors may, in its sole discretion, determine that any meeting shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Ohio law.”

~~The Amended and Restated Code of Regulations including this amendment is included as Exhibit 3.1 to this Annual Report on Form~~

~~10-K,~~

September 30, 2022 fiscal year end and is incorporated herein by reference. ~~The foregoing summary~~Portions of ~~the amendment is qualified in its entirety by reference to the specific provisions of the Amended and Restated Code of Regulations.~~

~~- 68 -~~

~~Table of Contents~~

~~PART III.~~

~~ITEM 10.~~

~~DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE~~

Information about our directors and officers may be found under the captions “Election of Directors” and “Directors and Executive Officers” in our Proxy Statement for the Annual Meeting of Shareholders to be held January 29, 2020 (the “Proxy Statement”). Information about our Audit Committee may be found under the caption “Committees of the Board of Directors” in the Proxy Statement. That information is incorporated herein by reference.

We have adopted a code of ethics that applies to all of our employees, including our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, and other finance organization employees. The code of ethics is publicly available on our website at meridiabioscience.com. If we make any substantive amendments to the code of ethics or grant any waiver, including any implicit waiver, from a provision of the code to our Chief Executive Officer, Chief Financial Officer, or Chief Accounting Officer, we will disclose the nature of the amendment or waiver on that website or in a report on Form

~~8-K.~~

~~ITEM 11.~~

~~EXECUTIVE COMPENSATION~~

~~The information in~~ the Proxy Statement ~~set forth under~~related to the ~~captions “Director Compensation,” “Compensation Discussion and Analysis” “Compensation Committee Interlocks and Insider Participation,” and “Compensation Committee Report” is~~proposed Merger filed on September 8, 2022 are incorporated ~~herein~~ by ~~reference.~~

~~ITEM 12.~~

~~SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS~~

~~The information~~reference in ~~the Proxy Statement set forth under the captions “Security Ownership~~Part III of ~~Certain Beneficial Owners,” and “Equity Compensation Plan Information” is incorporated herein by reference.~~

~~ITEM 13.~~

~~CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE~~

~~The information set forth in the Proxy Statement under the captions “Corporate Governance” and “Transactions with Related Persons” is incorporated herein by reference.~~

~~ITEM 14.~~

~~PRINCIPAL ACCOUNTING FEES AND SERVICES~~

Information concerning principal accountant fees and services appears in the Proxy Statement under the headings “Principal Accounting Firm Fees” and “Committees of the Board of Directors” and is incorporated herein by reference.

~~- 69 -~~

~~Table of Contents~~

this report.

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	(1) and (2) FINANCIAL STATEMENTS AND SCHEDULES.

All financial statements and schedules required to be filed by Item 8 of this Form and included in this report have been so identified under Item 8. No additional financial statements or schedules are being filed since the requirements of paragraph (c) under Item 15 are not applicable to Meridian.

(b)	(3) EXHIBITS.


Exhibit Number		Description of Exhibit

2.1		Agreement and Plan of Merger, dated as of July 7, 2022, by and among Meridian, SD Biosensor, Inc., Columbus Holding Company, and Madeira Acquisition Corp. (Incorporated by reference to Meridian’s Form 8-K filed with the Securities and Exchange Commission (“SEC”) on July 7, 2022)
~~Exhibit~~ ~~Number~~
3.1			~~Description of Exhibit~~

	~~3.1~~			Amended Articles of Incorporation ~~(Filed herewith)~~(Incorporated by reference to Meridian’s Form 10-K filed with the SEC on November 26, 2019)

3.2
	~~3.2~~			Amended and Restated Code of Regulations ~~(Filed herewith)~~(Incorporated by reference to Meridian’s Form 10-K filed with the SEC on November 26, 2019)

4.1
	~~4.1~~			Description of Securities ~~(Filed herewith)~~(Incorporated by reference to Meridian’s Form 10-K filed with the SEC on November 26, 2019)

10.1*
	10.1*			Amendment No. 1 to Supplemental Benefit Agreement Dated September 23, 2014 between Meridian and John A. Kraeutler (Incorporated by reference to Meridian’s Form 8-K filed with the ~~Securities and Exchange Commission~~SEC on September 25, 2014)

10.2*
	10.2*			Third Amended and Restated Employment Agreement Dated October 3, 2016 between Meridian and John A. Kraeutler (Incorporated by reference to Meridian’s Form 8-K filed with the ~~Securities and Exchange Commission~~SEC on October 5, 2016)

10.3*
	10.3*			Amended and Restated Employment Agreement dated effective October 1, 2019 between Meridian and John P. Kenny (Incorporated by reference to Meridian’s Form 8-K filed with the ~~Securities and Exchange Commission~~SEC on November 7, 2019)

10.4*
	10.4*			~~Dividend Reinvestment Plan (Incorporated by reference to Meridian’s Annual Report on Form 10-K for the Fiscal Year Ended September 30, 1999)~~

	10.5*			2004 Equity Compensation Plan, amended and restated effective January 25, 2012 (Incorporated by reference to Meridian’s Quarterly Report on Form 10-Q for the Quarterly Period Ended December 31, 2011)

	10.6*			2012 Stock Incentive Plan, effective January 25, 2012 (Incorporated by reference to Meridian’s Quarterly Report on Form 10-Q for the Quarterly Period Ended December 31, 2011)

10.5*
	10.7*			~~Form of Time-Based Restricted Share Unit Award Agreement~~Israeli Appendix to the Meridian Bioscience, Inc. 2012 Stock Incentive Plan dated effective July 10, 2020 (Incorporated by reference to Meridian’s Annual Report on Form 10-K for the Fiscal Year Ended September 30, ~~2018)~~2020)

- 75 -


10.6*		Meridian Bioscience, Inc. 2021 Omnibus Award Plan (Incorporated by reference to Meridian’s Quarterly Report on Form 10-Q for the Quarterly Period Ended March 31, 2021)

10.7*		Form of Time-Based Restricted Share Unit Award Agreement (Incorporated by reference to Meridian’s Form 10-K filed with the SEC on November 23, 2021)

10.8*		Form of Nonqualified Stock Option Agreement (Incorporated by reference to Meridian’s Form 10-K filed with the SEC on November 23, 2021)

10.9*†		Form of Performance-Based Restricted Share Unit Award Agreement (Incorporated by reference to Meridian’s Quarterly Report on Form 10-Q for the Quarterly Period Ended December 31, 2021)

10.10*†		Chief Executive Officer Cash-Based Incentive Compensation Plan for Fiscal Year 2022 (Incorporated by reference to Meridian’s Quarterly Report on Form 10-Q for the Quarterly Period Ended December 31, 2021)

10.11*†		Executive Vice President Cash-Based Incentive Compensation Plan for Fiscal Year 2022 (Incorporated by reference to Meridian’s Quarterly Report on Form 10-Q for the Quarterly Period Ended December 31, 2021)

10.12*		Form of Meridian Bioscience, Inc. Change in Control Agreement dated August 4, 2016 (Incorporated by reference to Meridian’s Quarterly Report on Form 10-Q for the Quarterly Period Ended June 30, 2016)

10.13
	10.9**		~~Share Purchase~~Amended and Restated Credit Agreement, dated as of ~~April 29, 2019~~October 25, 2021, by and among GenePOC Inc., Meridian Bioscience Canada Inc., the shareholders of GenePOC Inc., Apres-Demain Holding SA, as Shareholders’ Representative, and Meridian Bioscience, Inc. (Incorporated by reference to Meridian’s Quarterly Report on Form 10-Q for the Quarterly Period Ended March 31, 2019)

~~- 70 -~~

~~Table of Contents~~


	10.10**		~~Credit Agreement, dated May 24, 2019 between~~ Meridian Bioscience, Inc., as ~~borrower,~~Borrower, the Guarantors ~~from time to time~~ party thereto, the Lenders ~~from time to time~~ party thereto, ~~and~~ PNC Bank, National Association, as administrative agent, PNC Capital Markets LLC, as joint lead arranger and sole bookrunner, and Fifth Third Bank, National Association, as joint lead arranger and syndication agent (Incorporated by reference to Meridian’s Form 8-K filed with the ~~Securities and Exchange Commission~~SEC on ~~May 31, 2019)~~October 29, 2021)

10.14*
	10.11**		~~Promissory Note~~Offer Letter, dated ~~June 3, 2019~~February 8, 2022, between Meridian ~~Bioscience Canada Inc.~~ and ~~GenePOC Inc.~~Andrew Kitzmiller (Incorporated by reference to Meridian’s Form 8-K filed with the ~~Securities and Exchange Commission~~SEC on ~~June 3, 2019)~~February 21, 2022)

10.15
	10.12*		~~Consulting~~Form of Indemnification Agreement ~~between Meridian Bioscience, Inc. and Melissa Lueke dated December 10, 2018~~ (Incorporated by reference to Meridian’s Current Report on Form 8-K filed with the ~~Securities and Exchange Commission~~SEC on ~~December 12, 2018)~~July 7, 2022)

21
	10.13*		~~Cash-Based Incentive Compensation Plan for Fiscal Year 2019 (Incorporated by reference to Meridian’s Form 8-K filed with the Securities and Exchange Commission on December 12, 2018)~~

	10.14*		Separation Agreement and General Release Agreement between Meridian Bioscience, Inc. and Lawrence Baldini dated April 26, 2019 (Incorporated by reference to Meridian’s Form 8-K filed with the Securities and Exchange Commission on April 30, 2019)

	10.15*		Separation Agreement and General Release between Meridian Bioscience, Inc. and Eric Rasmussen dated June 21, 2019 (Incorporated by reference to Meridian’s Form 8-K filed with the Securities and Exchange Commission on June 25, 2019)

	14		~~Code of Ethics (Incorporated by reference to Meridian’s Annual Report on Form 10-K for the Fiscal Year Ended September 30, 2003)~~

	21		List of Subsidiaries of the Registrant (Filed herewith)

23.1
	23		Consent of Independent Registered Public Accounting Firm (Filed herewith)

23.2		Consent of Independent Registered Public Accounting Firm (Filed herewith)

31.1
	~~31.1~~		Certification of Principal Executive Officer required by Rule 13a-14(a) (Filed herewith)

31.2
	~~31.2~~		Certification of Principal Financial Officer required by Rule 13a-14(a) (Filed herewith)

32**
	32***		Section 1350 Certification of Chief Executive Officer and Chief Financial Officer (Furnished herewith)

101.INS***
	~~101.INS~~		Inline XBRL Instance Document

101.SCH***
	~~101.SCH~~		Inline XBRL Taxonomy Extension Schema

- 76 -


101.CAL***
	~~101.CAL~~	Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF***
	~~101.DEF~~	Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB***
	~~101.LAB~~	Inline XBRL Taxonomy Extension Label Linkbase

101.PRE***
	~~101.PRE~~	Inline XBRL Taxonomy Extension Presentation Linkbase

104***
	~~104~~	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Management Compensatory Contracts

~~- 71 -~~

~~Table of Contents~~

**	Furnished, not filed

***

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

†

Schedules to and certain portions of these exhibits have been omitted pursuant to Item 601(b)(2) of Regulation

S-K.

The omitted information is not material and would likely cause competitive harm to the Registrant if publicly disclosed. The Registrant hereby agrees to furnish a copy of any omitted schedule or other portion to the SEC upon request.

~~***~~

~~Furnished, not filed.~~

Meridian will provide shareholders with any exhibit upon the payment of a specified reasonable fee, which fee shall be limited to Meridian’s reasonable expenses in furnishing such exhibit.

ITEM 16.

FORM 10-K SUMMARY

Not applicable.

- 77 -

~~FORM~~

~~10-K~~

~~SUMMARY~~

~~None.~~

~~- 72 -~~

~~Table of Contents~~

SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


MERIDIAN BIOSCIENCE, INC.

By:
~~By:~~		/s/ Jack Kenny
Date: November ~~26, 2019~~ 22, 2022
Jack Kenny
Chief Executive Officer

We, the undersigned directors and officers of the Registrant, hereby severally constitute Jack Kenny and ~~Bryan T. Baldasare,~~Andrew S. Kitzmiller, and each of them singly, our true and lawful attorneys with full power to them and each of them to sign for us, in our names in the capacities indicated below, any and all amendments to the Annual Report on Form

10-K

filed with the Securities and Exchange Commission.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


Signature	Capacity	Date

/s/ Jack Kenny	Chief Executive Officer and Director	November ~~26, 2019~~ 22, 2022
Jack Kenny

/s/ Andrew S. Kitzmiller
~~/s/ Bryan T. Baldasare~~	Executive Vice President and Chief	November ~~26, 2019~~ 22, 2022
~~Bryan T. Baldasare~~ Andrew S. Kitzmiller	Financial Officer ~~and Secretary~~ ~~(Principal~~(Principal Financial ~~and Accounting~~ Officer)

/s/ Julie Smith	Senior Vice President and Controller	November 22, 2022
~~/s/ David C. Phillips~~ Julie Smith	(Principal Accounting Officer)

/s/ John C. McIlwraith	Chairman of the Board	November ~~26, 2019~~ 22, 2022
~~David~~John C. ~~Phillips~~ McIlwraith

/s/ James M. Anderson	Director	November ~~26, 2019~~ 22, 2022
James M. Anderson

/s/ Anthony P. Bihl III	Director	November 22, 2022
~~/s/ Dwight E. Ellingwood~~	~~Director~~	~~November 26, 2019~~
~~Dwight E. Ellingwood~~ Anthony P. Bihl III

/s/ Dwight E. Ellingwood	Director	November 22, 2022
~~/s/ John C. McIlwraith~~	~~Director~~	~~November 26, 2019~~
~~John C. McIlwraith~~ Dwight E. Ellingwood

/s/ John M. Rice, Jr.	Director	November ~~26, 2019~~ 22, 2022
John M. Rice, Jr.

/s/ Catherine A. Sazdanoff	Director	November ~~26, 2019~~ 22, 2022
Catherine A. Sazdanoff

/s/ Felicia Williams	Director	November ~~26, 2019~~ 22, 2022
Felicia Williams

- 7378 -

~~Table of Contents~~

SCHEDULE II

Meridian Bioscience, Inc.

and Subsidiaries

Valuation and Qualifying Accounts

(Dollars in thousands)

Years Ended September 30, ~~2019, 2018~~2022, 2021 and ~~2017~~

2020

Description

Balance at
Beginning
of Period

Charged to
Costs and
Expenses

Deductions

Other (a)

Balance at
End of
Period

Year Ended September 30, 2019:

Allowance for doubtful accounts
$
310
$
347
$
  (100
) $
(20
) $
537

Inventory realizability reserves

1,971

774

(448
)
(12
)
2,285

Valuation allowances – deferred taxes

302

106

—

—

408

Year Ended September 30, 2018:

Allowance for doubtful accounts
$
307
$
39
$
(32
) $
(4
) $
310

Inventory realizability reserves

2,059

321

(405
)
(4
)
1,971

Valuation allowances – deferred taxes

342

—

(40
)
—

302

Year Ended September 30, 2017:

Allowance for doubtful accounts
$
334
$
90
$
(134
) $
17
$
307

Inventory realizability reserves

2,680

35

(661
)
5

2,059

Valuation allowances – deferred taxes

342

—

—

—

342


Description	Balance at Beginning of Period		Charged to Costs and Expenses		Deductions			Other (a)			Balance at End of Period
Year Ended September 30, 2022:
Allowance for doubtful accounts	$	1,078	$	946	$	(662	)	$	(37	)	$	1,325
Inventory realizability reserves		4,997		5,121		(3,882	)		(104	)		6,132
Valuation allowances – deferred taxes		1,624		666		(760	)		(103	)		1,427

Year Ended September 30, 2021:
Allowance for doubtful accounts	$	513	$	583	$	(34	)	$	16		$	1,078
Inventory realizability reserves		3,629		2,703		(1,297	)		(38	)		4,997
Valuation allowances – deferred taxes		895		729		—			—			1,624

Year Ended September 30, 2020:
Allowance for doubtful accounts	$	537	$	34	$	(75	)	$	17		$	513
Inventory realizability reserves		2,441		1,775		(564	)		(23	)		3,629
Valuation allowances – deferred taxes		666		335		(106	)		—			895

(a)	Balances reflect the effects of currency translation.

- 7

79 -


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Shares, No Par Value	VIVO	The NASDAQ Stock Market LLC

~~Title of each class~~	~~Trading Symbol~~	~~Name of each exchange of which registered~~
~~Common Shares, No Par Value~~	~~VIVO~~	~~The NASDAQ Stock Market LLC~~
		(NASDAQ Global Select Market)


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated ~~Large accelerated~~ filer	☒ ☐	~~Accelerated filer~~ Smaller reporting company	☐

Emerging growth company
~~Non-accelerated filer~~	☐	~~Smaller reporting company~~	☐

~~Emerging~~ G ~~rowth~~ C ~~ompany~~	☐


	~~Page~~
~~Part I~~
			Page
~~Item 1~~ Part I

Item 1	Business	4 5
Item 1A	Risk Factors	11 12
Item 1B	Unresolved Staff Comments	20 25
Item 2	Properties	21 25
Item 3	Legal Proceedings	21 26
Item 4	Mine Safety Disclosures	22 27

Part II

Item 5
~~Item 5~~	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	22 27
Item 6	~~Selected Financial Data~~Intentionally Omitted	24 28
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24 28
Item 7A	Quantitative and Qualitative Disclosures about Market Risk	33 39
Item 8	Financial Statements and Supplementary Data	34 40
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	68 74
Item 9A	Controls and Procedures	68 74
Item 9B	Other Information	68 75
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	75

Part III

Item 10
~~Item 10~~	Directors, Executive Officers and Corporate Governance	69 75
Item 11	Executive Compensation	69 75
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	69 75
Item 13	Certain Relationships and Related Transactions, and Director Independence	69 75
Item 14	Principal Accountant Fees and Services	69 75
Item 15	Exhibits and Financial Statement Schedules	70 75
Item 16	Form 10-K Summary	72 77


Type of Segment Information		Location within ~~Annual Report on~~ Form 10-K
Physical locations and activities		Item 2. “Properties”

Net revenues by geographic region
~~Revenue by geographic region~~		Item ~~7. “Management’s Discussion and Analysis of Financial Condition & Results of Operations” (hereafter “MD&A”)~~

~~Financial information~~		~~Note 9~~8. “Note 2 of Consolidated Financial ~~Statements~~ Statements”

Financial information		Item 8. “Note 15 of Consolidated Financial Statements”


Meridian Employees	2022
Salaried workforce		529
Managers and above		161
Part-time employees		27
Average age		43
Average length of service in years		7
Employee turnover rate (voluntary)		25	%
Fiscal 2022 net revenues per employee (in thousands)	$	432


Equal Employment Opportunity Table (by number of employees) U.S. Employee Diversity as of September 30, 2022
Job category	Gender	White		Black/African American		Hispanic/Latino		Asian		American Indian/Alaskan Native		Two or more races		Total
Executive/senior level officials and managers	Male		10		—		—		1		—		—		11
Executive/senior level officials and managers	Female		2		—		1		—		—		—		3
First/mid-level officials and managers	Male		47		5		2		2		—		—		56
First/mid-level officials and managers	Female		40		3		—		4		—		—		47
Professionals	Male		51		6		3		4		—		2		66
Professionals	Female		65		10		6		10		—		3		94
All other	Male		74		7		4		9		—		—		94
All other	Female		84		14		7		13		—		2		120
Total	Male		182		18		9		16		—		2		227
Total	Female		191		27		14		27		—		5		264


Income Statement Information (Amounts in thousands, except per share data)

For the Year Ended September 30,	2019		2018		2017		2016		2015
Net revenues	$	201,014	$	213,571	$	200,771	$	196,082	$	194,830
Gross profit		118,325		130,697		124,292		127,212		121,882
Operating income		32,699		31,584		37,382		51,378		56,060
Net earnings		24,382		23,849		21,557		32,229		35,540
Basic earnings per share	$	0.57	$	0.56	$	0.51	$	0.77	$	0.85
Diluted earnings per share	$	0.57	$	0.56	$	0.51	$	0.76	$	0.85
Cash dividends declared per share	$	0.250	$	0.500	$	0.575	$	0.800	$	0.800
Book value per share	$	4.47	$	4.14	$	4.02	$	3.95	$	3.96

Balance Sheet Information

As of September 30,	2019		2018		2017		2016		2015
Current assets	$	144,761	$	139,053	$	133,875	$	126,791	$	119,422
Current liabilities		20,914		24,173		22,887		22,571		15,251
Total assets		325,478		251,377		249,777		252,028		183,282
Long-term debt obligations		75,824		50,180		54,647		58,360		—
Shareholders’ equity		190,967		175,418		169,585		166,472		165,873


	Total		Less than 1 Year		1-3 Years		4-5 Years		More than 5 Years
Operating leases (1)	$	6,567	$	1,528	$	3,711	$	1,145	$	183
Purchase obligations (2)		14,995		14,203		737		55		—
Acquisition price holdback and contingent consideration (3)		75,000		—		75,000		—		—

Uncertain income tax positions liability and interest (4)		511		511		—		—		—

Total	$	97,073	$	16,242	$	79,448	$	1,200	$	183


	Common Shares Issued		Additional Paid-in Capital			Retained Earnings			Accum Other Comp Income (Loss)			Total
B alance at September 30, 2016		42,107	$	122,356		$	49,632		$	(5,516	)	$	166,472

Cash dividends paid - $0.575 per share		—		—			(24,266	)		—			(24,266	)
Conversion of restricted share units and exercise of stock options		100		(129	)		—			—			(129	)
Stock compensation expense		—		3,381			—			—			3,381
Net earnings		—		—			21,557			—			21,557
Foreign currency translation adjustment		—		—			—			1,616			1,616
Hedging activity, net of tax		—		—			—			954			954

Balance at September 30, 2017		42,207		125,608			46,923			(2,946	)		169,585

Cash dividends paid - $0.500 per share		—		—			(21,170	)		—			(21,170	)
Conversion of restricted share units and ex ercise of stock options		193		183			—			—			183
Stock compensation expense		—		3,402			—			—			3,402
Net earnings		—		—			23,849			—			23,849
Foreign currency translation adjustment		—		—			—			(1,075	)		(1,075	)
Hedging activity, net of tax		—		—			—			644			644

Balance at September 30, 2018		42,400		129,193			49,602			(3,377	)		175,418

Cash dividends paid - $0.250 per share		—		—			(10,612	)		—			(10,612	)
Conversion of restricted share units and exercise of stock options		312		390			—			—			390
Stock compensation expense		—		3,251			—			—			3,251
Net earnings		—		—			24,382			—			24,382
Foreign currency translation adjustment		—		—			—			(802	)		(802	)
Hedging activity, net of tax		—		—			—			(944	)		(944	)
Adoption of ASU 2014-09		—		—			(116	)		—			(116	)
Adoption of ASU 2018-02		—		—			(148	)		148			—
��
Balance at September 30, 2019		42,712	$	132,834		$	63,108		$	(4,975	)	$	190,967


	September 30, 2019				September 30, 2018
	Cash and Equivalents		Other		Cash and Equivalents		Other
Institutional money market funds	$	20,913	$	—	$	20,421	$	—
Cash on hand –
Restricted		—		—		—		1,000
Unrestricted		41,484		—		39,342		—

Total	$	62,397	$	—	$	59,763	$	1,000


	Balance at September 30, 2018			New Revenue Standard Adjustment			Balance at October 1, 2018
PROPERTY, PLANT AND EQUIPMENT
Machinery, equipment and furniture	$	50,606		$	8,696		$	59,302
Accumulated depreciation and amortization		(55,846	)		(7,611	)		(63,457	)
OTHER ASSETS
Deferred instrument costs, net		1,239			(1,239	)		—
NON-CURRENT LIABILITIES
Deferred income taxes		(3,769	)		38			(3,731	)
SHAREHOLDERS’ EQUITY
Retained earnings		(49,602	)		116			(49,486	)


							2019 vs. 2018			2018 vs. 2017
	2019		2018		2017		Inc (Dec)			Inc (Dec)
Diagnostics-
Americas	$	110,135	$	123,916	$	117,161		(11	)%		6	%
EMEA		23,865		23,922		22,594		—	%		6	%
ROW		2,682		2,616		3,766		3	%		(31	)%

Total Diagnostics		136,682		150,454		143,521		(9	)%		5	%

Life Science-
Americas		19,443		21,080		20,265		(8	)%		4	%
EMEA		29,157		24,715		22,365		18	%		11	%
ROW		15,732		17,322		14,620		(9	)%		18	%

Total Life Science		64,332		63,117		57,250		2	%		10	%

Consolidated	$	201,014	$	213,571	$	200,771		(6	)%		6	%


			Fair Value Measurements Using Inputs Considered as
As of September 31, 2019	Carrying Value		Level 1		Level 2		Level 3
Contingent consideration	$	27,200	$	—	$	—	$	27,200


	PRELIMINARY
	June 3, 2019 (as initially reported)		Measurement Period Adjustments			June 3, 2019 (as adjusted)
Fair value of assets acquired -
Accounts receivable	$	58	$	(1	)	$	57
Inventories		1,617		(106	)		1,511
Other current assets		77		7			84
Property, plant and equipment		1,520		(96	)		1,424
Goodwill		34,482		100			34,582
Other intangible assets (estimated useful life):
License agreement (10 years)		5,990		—			5,990
Technology (15 years)		34,040		96			34,136
Government grant (1.33 years)		800		—			800

		78,584		—			78,584
Fair value of liabilities assumed -
Accounts payable and accrued expenses		1,082		(24	)		1,058

Total consideration paid (including contingent consideration currently estimated at $27,200)	$	77,502	$	24		$	77,526


	2019		2018
Severance, other termination benefits and related costs	$	2,046	$	5,012
Lease and other contract termination fees		54		353
Loss on fixed asset disposals and inventory scrap		528		225
Other		211		742

Total	$	2,839	$	6,332


	2019			2018
Unrecognized income tax benefits at beginning of year	$	262		$	517
Additions for tax positions of prior years		83			—
Reductions for tax positions of prior years		(100	)		—
Additions for tax positions of current year		138			—
Tax examination and other settlements		—			(161	)
Expiration of statute of limitations		—			(94	)

Unrecognized income tax benefits at end of year	$	383		$	262

Fiscal 2017
Net revenues -
Third-party	$	143,521	$	57,250	$	—		$	—		$	200,771
Inter-segment		389		537		—			(926	)		—
Operating income		34,124		14,086		(11,097	)		269			37,382
Depreciation and amortization		7,037		2,053		—			—			9,090
Capital expenditures		2,554		1,913		—			—			4,467
Goodwill		35,213		19,713		—			—			54,926
Other intangible assets, net		24,973		1,731		—			—			26,704
Total assets		180,226		69,938		—			(387	)		249,777


For the Quarter Ended in Fiscal 2019	December 31		March 31		June 30		September 30
Net revenues	$	51,480	$	50,248	$	48,440	$	50,846
Gross profit		31,572		29,338		28,259		29,156
Net earnings		8,106		7,094		5,079		4,103
Basic earnings per common share		0.19		0.17		0.12		0.10
Diluted earnings per common share		0.19		0.17		0.12		0.10
Cash dividends per common share		0.125		0.125		—		—

For the Quarter Ended in Fiscal 2018	December 31		March 31		June 30		September 30
Net revenues	$	52,283	$	56,451	$	51,737	$	53,100
Gross profit		32,010		34,569		31,962		32,156
Net earnings		6,302		5,288		6,825		5,434
Basic earnings per common share		0.15		0.12		0.16		0.13
Diluted earnings per common share		0.15		0.12		0.16		0.13
Cash dividends per common share		0.125		0.125		0.125		0.125