☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, no par value | VIVO | NASDAQ Global Select Market |
Large accelerated filer | Accelerated filer | |||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
Class | Outstanding July 31, | |
Common Stock, no par value |
Page(s) | ||||||||||
PART I. | ||||||||||
Item 1. | ||||||||||
1 | ||||||||||
2 | ||||||||||
3 | ||||||||||
4-5 | ||||||||||
6 | ||||||||||
7-22 | ||||||||||
Item 2. | 22-31 | |||||||||
Item 3. | 31 | |||||||||
Item 4. | 31 | |||||||||
PART II. | ||||||||||
Item 1. | 32 | |||||||||
Item 1A. | ||||||||||
32 | ||||||||||
Item 6. | 32 | |||||||||
33 |
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
NET REVENUES | $ | 48,440 | $ | 51,737 | $ | 150,168 | $ | 160,471 | ||||||||
COST OF SALES | 20,181 | 19,775 | 60,999 | 61,930 | ||||||||||||
GROSS PROFIT | 28,259 | 31,962 | 89,169 | 98,541 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Research and development | 4,594 | 4,264 | 12,294 | 13,159 | ||||||||||||
Selling and marketing | 6,747 | 8,502 | 21,221 | 25,963 | ||||||||||||
General and administrative | 8,002 | 8,380 | 24,288 | 26,470 | ||||||||||||
Acquisition-related costs | 473 | — | 1,445 | — | ||||||||||||
Restructuring costs | 1,801 | 913 | 1,701 | 5,105 | ||||||||||||
Litigation costs | 178 | 1,168 | 1,370 | 3,370 | ||||||||||||
Total operating expenses | 21,795 | 23,227 | 62,319 | 74,067 | ||||||||||||
OPERATING INCOME | 6,464 | 8,735 | 26,850 | 24,474 | ||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest income | 194 | 109 | 547 | 271 | ||||||||||||
Interest expense | (448 | ) | (375 | ) | (1,158 | ) | (1,149 | ) | ||||||||
Other, net | 268 | 151 | (38 | ) | (94 | ) | ||||||||||
Total other income (expense) | 14 | (115 | ) | (649 | ) | (972 | ) | |||||||||
EARNINGS BEFORE INCOME TAXES | 6,478 | 8,620 | 26,201 | 23,502 | ||||||||||||
INCOME TAX PROVISION | 1,399 | 1,795 | 5,922 | 5,087 | ||||||||||||
NET EARNINGS | $ | 5,079 | $ | 6,825 | $ | 20,279 | $ | 18,415 | ||||||||
BASIC EARNINGS PER COMMON SHARE | $ | 0.12 | $ | 0.16 | $ | 0.48 | $ | 0.44 | ||||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 0.12 | $ | 0.16 | $ | 0.47 | $ | 0.43 | ||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC | 42,639 | 42,349 | 42,526 | 42,307 | ||||||||||||
EFFECT OF DILUTIVE STOCK OPTIONS AND RESTRICTED SHARE UNITS | 271 | 409 | 381 | 405 | ||||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED | 42,910 | 42,758 | 42,907 | 42,712 | ||||||||||||
ANTI-DILUTIVE SECURITIES: | ||||||||||||||||
Common share options and restricted share units | 1,215 | 995 | 1,073 | 1,009 | ||||||||||||
DIVIDENDS DECLARED PER COMMON SHARE | $ | — | $ | 0.125 | $ | 0.250 | $ | 0.375 | ||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
NET REVENUES | $ | 84,797 | $ | 48,440 | $ | 189,514 | $ | 150,168 | ||||||||
COST OF SALES | 28,945 | 20,181 | 71,768 | 60,999 | ||||||||||||
GROSS PROFIT | 55,852 | 28,259 | 117,746 | 89,169 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Research and development | 6,743 | 4,594 | 16,953 | 12,294 | ||||||||||||
Selling and marketing | 6,261 | 6,747 | 19,459 | 21,221 | ||||||||||||
General and administrative | 12,439 | 8,002 | 31,675 | 24,288 | ||||||||||||
Acquisition-related costs | 1,641 | 473 | 3,428 | 1,445 | ||||||||||||
Change in fair value of contingent consideration obligation | (6,124 | ) | — | (7,428 | ) | — | ||||||||||
Restructuring costs | 93 | 1,801 | 620 | 1,701 | ||||||||||||
Selected legal costs | 134 | 178 | 1,189 | 1,370 | ||||||||||||
Total operating expenses | 21,187 | 21,795 | 65,896 | 62,319 | ||||||||||||
OPERATING INCOME | 34,665 | 6,464 | 51,850 | 26,850 | ||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest income | 3 | 194 | 137 | 547 | ||||||||||||
Interest expense | (703 | ) | (448 | ) | (2,002 | ) | (1,158 | ) | ||||||||
Other, net | 908 | 268 | 1,561 | (38 | ) | |||||||||||
Total other income (expense) | 208 | 14 | (304 | ) | (649 | ) | ||||||||||
EARNINGS BEFORE INCOME TAXES | 34,873 | 6,478 | 51,546 | 26,201 | ||||||||||||
INCOME TAX PROVISION | 7,366 | 1,399 | 11,853 | 5,922 | ||||||||||||
NET EARNINGS | $ | 27,507 | $ | 5,079 | $ | 39,693 | $ | 20,279 | ||||||||
BASIC EARNINGS PER COMMON SHARE | $ | 0.64 | $ | 0.12 | $ | 0.93 | $ | 0.48 | ||||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 0.64 | $ | 0.12 | $ | 0.92 | $ | 0.47 | ||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC | 42,837 | 42,639 | 42,819 | 42,526 | ||||||||||||
EFFECT OF DILUTIVE STOCK OPTIONS AND RESTRICTED SHARE UNITS | 436 | 271 | 219 | 381 | ||||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED | 43,273 | 42,910 | 43,038 | 42,907 | ||||||||||||
ANTI-DILUTIVE SECURITIES: | ||||||||||||||||
Common share options and restricted share units | 854 | 1,215 | 1,298 | 1,073 | ||||||||||||
DIVIDENDS DECLARED PER COMMON SHARE | $ | — | $ | — | $ | — | $ | 0.250 | ||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
NET EARNINGS | $ | 27,507 | $ | 5,079 | $ | 39,693 | $ | 20,279 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Foreign currency translation adjustment | 597 | 1,692 | 579 | 1,353 | ||||||||||||
Unrealized loss on cash flow hedge | (390 | ) | (297 | ) | (703 | ) | (1,184 | ) | ||||||||
Reclassification of gain on cash flow hedge | (77 | ) | — | (231 | ) | — | ||||||||||
Income taxes related to items of other comprehensive income | 115 | 222 | 230 | 445 | ||||||||||||
Other comprehensive income (loss), net of tax | 245 | 1,617 | (125 | ) | 614 | |||||||||||
COMPREHENSIVE INCOME | $ | 27,752 | $ | 6,696 | $ | 39,568 | $ | 20,893 | ||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
NET EARNINGS | $ | 5,079 | $ | 6,825 | $ | 20,279 | $ | 18,415 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Foreign currency translation adjustment | 1,692 | (1,912 | ) | 1,353 | (695 | ) | ||||||||||
Unrealized gain (loss) on cash flow hedge | (297 | ) | 109 | (1,184 | ) | 874 | ||||||||||
Income taxes related to items of other comprehensive income | 222 | (28 | ) | 445 | (247 | ) | ||||||||||
Other comprehensive income (loss), net of tax | 1,617 | (1,831 | ) | 614 | (68 | ) | ||||||||||
COMPREHENSIVE INCOME | $ | 6,696 | $ | 4,994 | $ | 20,893 | $ | 18,347 |
Nine Months Ended June 30, | 2019 | 2018 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net earnings | $ | 20,279 | $ | 18,415 | ||||
Non-cash items included in net earnings: | ||||||||
Depreciation of property, plant and equipment | 3,984 | 3,320 | ||||||
Amortization of intangible assets | 2,778 | 2,732 | ||||||
Amortization of deferred instrument costs | — | 581 | ||||||
Stock-based compensation | 2,728 | 2,882 | ||||||
Deferred income taxes | (852 | ) | (71 | ) | ||||
Loss on disposition and write-down of fixed assets | 220 | — | ||||||
Change in the following, net of acquisition: | ||||||||
Accounts receivable | 1,014 | (52 | ) | |||||
Inventories | (67 | ) | (4,118 | ) | ||||
Prepaid expenses and other current assets | (1,849 | ) | (2,106 | ) | ||||
Accounts payable and accrued expenses | (1,703 | ) | 2,967 | |||||
Income taxes payable | 1,402 | (1,003 | ) | |||||
Other, net | 412 | 35 | ||||||
Net cash provided by operating activities | 28,346 | 23,582 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchase of property, plant and equipment | (3,314 | ) | (3,340 | ) | ||||
Acquisition of GenePOC business | (45,239 | ) | — | |||||
Net cash used for investing activities | (48,553 | ) | (3,340 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Dividends paid | (10,612 | ) | (15,870 | ) | ||||
Proceeds from revolving credit facility | 75,824 | — | ||||||
Payment of debt issuance costs | (489 | ) | — | |||||
Payments on term loan | (50,250 | ) | (3,375 | ) | ||||
Proceeds and tax benefits from exercises of stock options | 614 | 183 | ||||||
Net cash provided by (used for) financing activities | 15,087 | (19,062 | ) | |||||
Effect of Exchange Rate Changes on Cash and Equivalents and Restricted Cash | (451 | ) | (322 | ) | ||||
Net Increase (Decrease) in Cash and Equivalents and Restricted Cash | (5,571 | ) | 858 | |||||
Cash and Equivalents and Restricted Cash at Beginning of Period | 60,763 | 58,072 | ||||||
Cash and Equivalents and Restricted Cash at End of Period | $ | 55,192 | $ | 58,930 | ||||
Cash and Equivalents | $ | 55,192 | $ | 57,930 | ||||
Restricted Cash | — | 1,000 | ||||||
Cash and Equivalents and Restricted Cash at End of Period | $ | 55,192 | $ | 58,930 | ||||
Nine Months Ended June 30, | 2020 | 2019 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net earnings | $ | 39,693 | $ | 20,279 | ||||
Non-cash items included in net earnings: | ||||||||
Depreciation of property, plant and equipment | 3,762 | 3,984 | ||||||
Amortization of intangible assets | 5,604 | 2,778 | ||||||
Stock-based compensation | 2,809 | 2,728 | ||||||
Deferred income taxes | 2,214 | (852 | ) | |||||
Loss on disposition and write-down of fixed assets | — | 220 | ||||||
Change in accrued contingent consideration | (7,428 | ) | — | |||||
Change in the following, net of acquisitions: | ||||||||
Accounts receivable | (6,352 | ) | 1,014 | |||||
Inventories | (17,828 | ) | (67 | ) | ||||
Prepaid expenses and other current assets | 68 | (1,849 | ) | |||||
Accounts payable and accrued expenses | 4,422 | (1,703 | ) | |||||
Income taxes payable | 3,401 | 1,402 | ||||||
Other, net | 1,315 | 583 | ||||||
Net cash provided by operating activities | 31,680 | 28,517 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchase of property, plant and equipment | (2,471 | ) | (3,314 | ) | ||||
Acquisition of Exalenz , net of cash acquired | (51,299 | ) | — | |||||
Acquisition of GenePOC business | — | (45,239 | ) | |||||
Net cash used for investing activities | (53,770 | ) | (48,553 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Dividends paid | — | (10,612 | ) | |||||
Payment on revolving credit facility | (27,000 | ) | — | |||||
Proceeds from revolving credit facility | 50,000 | 75,824 | ||||||
Payment of debt issuance costs | (116 | ) | (489 | ) | ||||
Payments on term loan | — | (50,250 | ) | |||||
Proceeds from exercise of stock options | — | 443 | ||||||
Net cash p rovided by | 22,884 | 14,916 | ||||||
Effect of Exchange Rate Changes on Cash and Equivalents | 254 | (451 | ) | |||||
Net Increase (Decrease) in Cash and Equivalents | 1,048 | (5,571 | ) | |||||
Cash and Equivalents at Beginning of Period | 62,397 | 60,763 | ||||||
Cash and Equivalents at End of Period | $ | 63,445 | $ | 55,192 | ||||
June 30, | ||||||||
2019 | September 30, | |||||||
(Unaudited) | 2018 | |||||||
CURRENT ASSETS | ||||||||
Cash and equivalents | $ | 55,192 | $ | 59,763 | ||||
Accounts receivable, less allowances of $421 and $310 | 31,995 | 32,336 | ||||||
Inventories | 43,305 | 41,993 | ||||||
Prepaid expenses and other current assets | 6,897 | 4,961 | ||||||
Total current assets | 137,389 | 139,053 | ||||||
PROPERTY, PLANT AND EQUIPMENT, at Cost | ||||||||
Land | 1,157 | 1,160 | ||||||
Buildings and improvements | 32,430 | 32,444 | ||||||
Machinery, equipment and furniture | 63,344 | 50,606 | ||||||
Construction in progress | 1,292 | 1,631 | ||||||
Subtotal | 98,223 | 85,841 | ||||||
Less: accumulated depreciation and amortization | 66,398 | 55,846 | ||||||
Net property, plant and equipment | 31,825 | 29,995 | ||||||
OTHER ASSETS | ||||||||
Goodwill | 90,107 | 54,637 | ||||||
Other intangible assets, net | 62,001 | 23,113 | ||||||
Restricted cash | — | 1,000 | ||||||
Deferred instrument costs, net | — | 1,239 | ||||||
Fair value of interest rate swap | — | 1,722 | ||||||
Deferred income taxes | 125 | 130 | ||||||
Other assets | 989 | 488 | ||||||
Total other assets | 153,222 | 82,329 | ||||||
TOTAL ASSETS | $ | 322,436 | $ | 251,377 | ||||
June 30, 2020 (Unaudited) | September 30, 2019 | |||||||
CURRENT ASSETS | ||||||||
Cash and equivalents | $ | 63,445 | $ | 62,397 | ||||
Accounts receivable, less allowances of $527 and $537, respectively | 42,384 | 35,608 | ||||||
Inventories | 60,468 | 39,617 | ||||||
Prepaid expenses and other current assets | 7,909 | 7,139 | ||||||
Total current assets | 174,206 | 144,761 | ||||||
PROPERTY, PLANT AND EQUIPMENT, at Cost | ||||||||
Land | 986 | 982 | ||||||
Buildings and improvements | 32,132 | 31,904 | ||||||
Machinery, equipment and furniture | 67,563 | 64,155 | ||||||
Construction in progress | 1,455 | 522 | ||||||
Subtotal | 102,136 | 97,563 | ||||||
Less: accumulated depreciation and amortization | 71,328 | 66,996 | ||||||
Net property, plant and equipment | 30,808 | 30,567 | ||||||
OTHER ASSETS | ||||||||
Goodwill | 118,567 | 89,241 | ||||||
Other intangible assets, net | 83,363 | 60,243 | ||||||
Right-of-use assets | 6,472 | — | ||||||
Deferred income taxes | 5,701 | 156 | ||||||
Other assets | 670 | 510 | ||||||
Total other assets | 214,773 | 150,150 | ||||||
TOTAL ASSETS | $ | 419,787 | $ | 325,478 | ||||
June 30, | ||||||||
2019 | September 30, | |||||||
(Unaudited) | 2018 | |||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 8,381 | $ | 6,260 | ||||
Accrued employee compensation costs | 6,795 | 7,263 | ||||||
Other accrued expenses | 3,214 | 5,065 | ||||||
Current portion of long-term debt | — | 5,250 | ||||||
Income taxes payable | 1,432 | 335 | ||||||
Total current liabilities | 19,822 | 24,173 | ||||||
NON-CURRENT LIABILITIES | ||||||||
Post-employment benefits | 2,384 | 2,646 | ||||||
Long-term debt | 75,824 | 44,930 | ||||||
Long-term income taxes payable | 736 | 441 | ||||||
Deferred income taxes | 2,917 | 3,769 | ||||||
Acquisition consideration | 32,200 | — | ||||||
Total non-current liabilities | 114,061 | 51,786 | ||||||
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, 42,670,805 and 42,399,962 shares issued, respectively | — | — | ||||||
Additional paid-in capital | 132,311 | 129,193 | ||||||
Retained earnings | 59,005 | 49,602 | ||||||
Accumulated other comprehensive loss | (2,763 | ) | (3,377 | ) | ||||
Total shareholders’ equity | 188,553 | 175,418 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 322,436 | $ | 251,377 | ||||
June 30, 2020 (Unaudited) | September 30, 2019 | |||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 13,492 | $ | 7,238 | ||||
Accrued employee compensation costs | 12,408 | 7,938 | ||||||
Current portion of acquisition consideration | 5,000 | — | ||||||
Current operating lease obligations | 1,827 | — | ||||||
Current government grant obligations | 577 | — | ||||||
Other accrued expenses | 4,856 | 3,758 | ||||||
Income taxes payable | 5,341 | 1,980 | ||||||
Total current liabilities | 43,501 | 20,914 | ||||||
NON-CURRENT LIABILITIES | ||||||||
Acquisition consideration | 19,774 | 32,202 | ||||||
Post-employment benefits | 2,450 | 2,500 | ||||||
Fair value of interest rate swaps | 703 | — | ||||||
Long-term operating lease obligations | 4,887 | — | ||||||
Long-term debt | 98,824 | 75,824 | ||||||
Government grant obligations | 10,596 | — | ||||||
Long-term income taxes payable | 549 | 549 | ||||||
Deferred income taxes | 4,711 | 2,522 | ||||||
Other non-current liabilities | 457 | — | ||||||
Total non-current liabilities | 142,951 | 113,597 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Preferred stock, 0 par value; 1,000,000 shares authorized; 0ne issued | — | — | ||||||
Common shares, 0 par value; 71,000,000 shares authorized, 42,839,088 and 42,712,296 shares issued, respectively | — | — | ||||||
Additional paid-in capital | 135,634 | 132,834 | ||||||
Retained earnings | 102,801 | 63,108 | ||||||
Accumulated other comprehensive loss | (5,100 | ) | (4,975 | ) | ||||
Total shareholders’ equity | 233,335 | 190,967 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 419,787 | $ | 325,478 | ||||
Common Shares Issued | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | ||||||||||||||||
THREE MONTHS ENDED JUNE 30, 2019 | ||||||||||||||||||||
Balance at March 31, 2019 | 42,515 | $ | 131,951 | $ | 54,074 | $ | (4,380 | ) | $ | 181,645 | ||||||||||
Conversion of restricted share units and exercise of stock options | 156 | — | — | — | — | |||||||||||||||
Stock compensation expense | — | 360 | — | — | 360 | |||||||||||||||
Net earnings | — | — | 5,079 | — | 5,079 | |||||||||||||||
Foreign currency translation adjustment | — | — | — | 1,692 | 1,692 | |||||||||||||||
Hedging activity, net of tax | — | — | — | (223 | ) | (223 | ) | |||||||||||||
Adoption of ASU 2018-02 | — | — | (148 | ) | 148 | — | ||||||||||||||
Balance at June 30, 2019 | 42,671 | $ | 132,311 | $ | 59,005 | $ | (2,763 | ) | $ | 188,553 | ||||||||||
THREE MONTHS ENDED JUNE 30, 2018 | ||||||||||||||||||||
Balance at March 31, 2018 | 42,344 | $ | 127,583 | $ | 47,936 | $ | (1,183 | ) | $ | 174,336 | ||||||||||
Cash dividends paid - $0.125 per share | — | — | (5,293 | ) | — | (5,293 | ) | |||||||||||||
Conversion of restricted share units and exercise of stock options | 14 | 183 | — | — | 183 | |||||||||||||||
Stock compensation expense | — | 907 | — | — | 907 | |||||||||||||||
Net earnings | — | — | 6,825 | — | 6,825 | |||||||||||||||
Foreign currency translation adjustment | — | — | — | (1,912 | ) | (1,912 | ) | |||||||||||||
Hedging activity, net of tax | — | — | — | 81 | 81 | |||||||||||||||
Balance at June 30, 2018 | 42,358 | $ | 128,673 | $ | 49,468 | $ | (3,014 | ) | $ | 175,127 | ||||||||||
NINE MONTHS ENDED JUNE 30, 2019 | ||||||||||||||||||||
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 | 271 | 390 | — | — | 390 | |||||||||||||||
Stock compensation expense | — | 2,728 | — | — | 2,728 | |||||||||||||||
Net earnings | — | — | 20,279 | — | 20,279 | |||||||||||||||
Foreign currency translation adjustment | — | — | — | 1,353 | 1,353 | |||||||||||||||
Hedging activity, net of tax | — | — | — | (887 | ) | (887 | ) | |||||||||||||
Adoption of ASU 2014-09 | — | — | (116 | ) | — | (116 | ) | |||||||||||||
Adoption of ASU 2018-02 | — | — | (148 | ) | 148 | — | ||||||||||||||
Balance at June 30, 2019 | 42,671 | $ | 132,311 | $ | 59,005 | $ | (2,763 | ) | $ | 188,553 | ||||||||||
NINE MONTHS ENDED JUNE 30, 2018 | ||||||||||||||||||||
Balance at September 30, 2017 | 42,207 | $ | 125,608 | $ | 46,923 | $ | (2,946 | ) | $ | 169,585 | ||||||||||
Cash dividends paid - $0.375 per share | — | — | (15,870 | ) | — | (15,870 | ) | |||||||||||||
Conversion of restricted share units and exercise of stock options | 151 | 183 | — | — | 183 | |||||||||||||||
Stock compensation expense | — | 2,882 | — | — | 2,882 | |||||||||||||||
Net earnings | — | — | 18,415 | — | 18,415 | |||||||||||||||
Foreign currency translation adjustment | — | — | — | (695 | ) | (695 | ) | |||||||||||||
Hedging activity, net of tax | — | — | — | 627 | 627 | |||||||||||||||
Balance at June 30, 2018 | 42,358 | $ | 128,673 | $ | 49,468 | $ | (3,014 | ) | $ | 175,127 | ||||||||||
Common Shares Issued | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | ||||||||||||||||
THREE MONTHS ENDED JUNE 30, 2020 Balance at March 31, 2020 | 42,831 | $ | 134,584 | $ | 75,294 | $ | (5,345) | $ | 204,533 | |||||||||||
Conversion of restricted share units | 8 | — | — | — | — | |||||||||||||||
Stock compensation expense | — | 1,050 | — | — | 1,050 | |||||||||||||||
Net earnings | — | — | 27,507 | — | 27,507 | |||||||||||||||
Foreign currency translation adjustment | — | — | — | 597 | 597 | |||||||||||||||
Hedging activity, net of tax | — | — | — | (352) | (352) | |||||||||||||||
Balance at June 30, 2020 | 42,839 | $ | 135,634 | $ | 102,801 | $ | (5,100) | $ | 233,335 | |||||||||||
THREE MONTHS ENDED JUNE 30, 2019 Balance at March 31, 2019 | 42,515 | $ | 131,951 | $ | 54,074 | $ | (4,380) | $ | 181,645 | |||||||||||
Conversion of restricted share units and exercise of stock options | 156 | — | — | — | — | |||||||||||||||
Stock compensation expense | — | 360 | — | — | 360 | |||||||||||||||
Net earnings | — | — | 5,079 | — | 5,079 | |||||||||||||||
Foreign currency translation adjustment | — | — | — | 1,692 | 1,692 | |||||||||||||||
Hedging activity, net of tax | — | — | — | (223) | (223) | |||||||||||||||
Adoption of ASU 2018-02 | — | — | (148) | 148 | — | |||||||||||||||
Balance at June 30, 2019 | 42,671 | $ | 132,311 | $ | 59,005 | $ | (2,763) | $ | 188,553 | |||||||||||
Common Shares Issued | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | ||||||||||||||||
NINE MONTHS ENDED JUNE 30, 2020 Balance at September 30, 2019 | 42,712 | $ | 132,834 | $ | 63,108 | $ | (4,975) | $ | 190,967 | |||||||||||
Conversion of restricted share units | 127 | (9) | — | — | (9) | |||||||||||||||
Stock compensation expense | — | 2,809 | — | — | 2,809 | |||||||||||||||
Net earnings | — | — | 39,693 | — | 39,693 | |||||||||||||||
Foreign currency translation adjustment | — | — | — | 579 | 579 | |||||||||||||||
Hedging activity, net of tax | — | — | — | (704) | (704) | |||||||||||||||
Balance at June 30, 2020 | 42,839 | $ | 135,634 | $ | 102,801 | $ | (5,100) | $ | 233,335 | |||||||||||
NINE MONTHS ENDED JUNE 30, 2019 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 | 271 | 390 | — | — | 390 | |||||||||||||||
Stock compensation expense | — | 2,728 | — | — | 2,728 | |||||||||||||||
Net earnings | — | — | 20,279 | — | 20,279 | |||||||||||||||
Foreign currency translation adjustment | — | — | — | 1,353 | 1,353 | |||||||||||||||
Hedging activity, net of tax | — | — | — | (887) | (887) | |||||||||||||||
Adoption of ASU 2014-09 | — | — | (116) | — | (116) | |||||||||||||||
Adoption of ASU 2018-02 | — | — | (148) | 148 | — | |||||||||||||||
Balance at June 30, 2019 | 42,671 | $ | 132,311 | $ | 59,005 | $ | (2,763) | $ | 188,553 | |||||||||||
1. | Basis of Presentation |
2. | Significant Accounting Policies |
Balance at September 30, 2018 | New Revenue Standard Adjustment | Balance at October 1, 2018 | ||||||||||
PROPERTY, PLAN 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 | ) |
Three Months Ended June 30, | Nine Months Ended June 30, | Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | Inc (Dec) | 2019 | 2018 | Inc (Dec) | 2020 | 2019 | Inc (Dec) | 2020 | 2019 | Inc (Dec) | |||||||||||||||||||||||||||||||||||||
Diagnostics- | ||||||||||||||||||||||||||||||||||||||||||||||||
Americas | $ | 27,356 | $ | 30,585 | (11 | )% | $ | 85,782 | $ | 95,511 | (10 | )% | $ | 17,575 | $ | 27,356 | (36 | )% | $ | 72,980 | $ | 84,042 | (13 | )% | ||||||||||||||||||||||||
EMEA | 5,076 | 5,144 | (1 | )% | 15,695 | 16,469 | (5 | )% | 3,576 | 5,076 | (30 | )% | 16,853 | 17,427 | (3 | )% | ||||||||||||||||||||||||||||||||
ROW | 686 | 639 | 7 | % | 1,806 | 1,660 | 9 | % | 447 | 686 | (35 | )% | 1,498 | 1,814 | (17 | )% | ||||||||||||||||||||||||||||||||
Total Diagnostics | 33,118 | 36,368 | (9 | )% | 103,283 | 113,640 | (9 | )% | 21,598 | 33,118 | (35 | )% | 91,331 | 103,283 | (12 | )% | ||||||||||||||||||||||||||||||||
Life Science- | ||||||||||||||||||||||||||||||||||||||||||||||||
Americas | 4,369 | 5,500 | (21 | )% | 14,347 | 15,875 | (10 | )% | 22,015 | 4,369 | 404 | % | 30,642 | 14,347 | 114 | % | ||||||||||||||||||||||||||||||||
EMEA | 6,389 | 5,756 | 11 | % | 21,608 | 18,307 | 18 | % | 26,070 | 6,389 | 308 | % | 40,977 | 21,608 | 90 | % | ||||||||||||||||||||||||||||||||
ROW | 4,564 | 4,113 | 11 | % | 10,930 | 12,649 | (14 | )% | 15,114 | 4,564 | 231 | % | 26,564 | 10,930 | 143 | % | ||||||||||||||||||||||||||||||||
Total Life Science | 15,322 | 15,369 | — | % | 46,885 | 46,831 | — | % | 63,199 | 15,322 | 312 | % | 98,183 | 46,885 | 109 | % | ||||||||||||||||||||||||||||||||
Consolidated | $ | 48,440 | $ | 51,737 | (6 | )% | $ | 150,168 | $ | 160,471 | (6 | )% | $ | 84,797 | $ | 48,440 | 75 | % | $ | 189,514 | $ | 150,168 | 26 | % | ||||||||||||||||||||||||
Three Months Ended June 30, | Nine Months Ended June 30, | Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | Inc (Dec) | 2019 | 2018 | Inc (Dec) | 2020 | 2019 | Inc (Dec) | 2020 | 2019 | Inc (Dec) | |||||||||||||||||||||||||||||||||||||
Diagnostics- | ||||||||||||||||||||||||||||||||||||||||||||||||
Molecular assays | $ | 5,937 | $ | 7,509 | (21 | )% | $ | 20,371 | $ | 26,200 | (22 | )% | $ | 3,182 | $ | 5,894 | (46 | )% | $ | 17,259 | $ | 20,208 | (15 | )% | ||||||||||||||||||||||||
Immunoassays & blood chemistry assays | 27,181 | 28,859 | (6 | )% | 82,912 | 87,440 | (5 | )% | ||||||||||||||||||||||||||||||||||||||||
Non -m olecular assays | 18,416 | 27,224 | (32 | )% | 74,072 | 83,075 | (11 | ) % | ||||||||||||||||||||||||||||||||||||||||
Total Diagnostics | $ | 33,118 | $ | 36,368 | (9 | )% | $ | 103,283 | $ | 113,640 | (9 | )% | $ | 21,598 | $ | 33,118 | (35 | )% | $ | 91,331 | $ | 103,283 | (12 | )% | ||||||||||||||||||||||||
Life Science- | ||||||||||||||||||||||||||||||||||||||||||||||||
Molecular reagents | $ | 5,495 | $ | 6,049 | (9 | )% | $ | 17,495 | $ | 17,882 | (2 | )% | $ | 38,784 | $ | 5,495 | 606 | % | $ | 55,691 | $ | 17,495 | 218 | % | ||||||||||||||||||||||||
Immunological reagents | 9,827 | 9,320 | 5 | % | 29,390 | 28,949 | 2 | % | 24,415 | 9,827 | 148 | % | 42,492 | 29,390 | 45 | % | ||||||||||||||||||||||||||||||||
Total Life Science | $ | 15,322 | $ | 15,369 | — | % | $ | 46,885 | $ | 46,831 | — | % | $ | 63,199 | $ | 15,322 | 312 | % | $ | 98,183 | $ | 46,885 | 109 | % | ||||||||||||||||||||||||
Three Months Ended June 30, | Nine Months Ended June 30, | Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | Inc (Dec) | 2019 | 2018 | Inc (Dec) | 2020 | 2019 | Inc (Dec) | 2020 | 2019 | Inc (Dec) | |||||||||||||||||||||||||||||||||||||
Diagnostics- | ||||||||||||||||||||||||||||||||||||||||||||||||
Gastrointestinal assays | $ | 17,232 | $ | 20,212 | (15 | )% | $ | 52,024 | $ | 59,631 | (13 | )% | $ | 9,584 | $ | 17,232 | (44 | )% | $ | 39,644 | $ | 52,024 | (24 | )% | ||||||||||||||||||||||||
Respiratory illness assays | 5,708 | 5,749 | (1 | )% | 21,242 | 22,779 | (7 | )% | 5,052 | 5,708 | (11 | )% | 23,664 | 21,242 | 11 | % | ||||||||||||||||||||||||||||||||
Blood chemistry assays | 4,750 | 5,005 | (5 | )% | 13,510 | 13,528 | — | % | 3,364 | 4,666 | (28 | ) % | 12,508 | 13,364 | (6 | )% | ||||||||||||||||||||||||||||||||
Other | 5,428 | 5,402 | — | % | 16,507 | 17,702 | (7 | )% | 3,598 | 5,512 | (35 | )% | 15,515 | 16,653 | (7 | )% | ||||||||||||||||||||||||||||||||
Total Diagnostics | $ | 33,118 | $ | 36,368 | (9 | )% | $ | 103,283 | $ | 113,640 | (9 | )% | $ | 21,598 | $ | 33,118 | (35 | )% | $ | 91,331 | $ | 103,283 | (12 | )% | ||||||||||||||||||||||||
(b) | Fair Value Measurements – |
Fair Value Measurements Using Inputs Considered as | ||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | |||||||||||||
Interest rate swaps (see Note 9) - | ||||||||||||||||
As of June 30, 2020 | $ | (703 | ) | $ | — | $ | (703 | ) | $ | — | ||||||
As of September 30, 2019 | $ | — | $ | — | $ | — | $ | — | ||||||||
Contingent consideration - | ||||||||||||||||
As of June 30, 2020 | $ | (19,774 | ) | $ | — | $ | — | $ | (19,774 | ) | ||||||
As of September 30, 2019 | $ | (27,202 | ) | $ | — | $ | — | $ | (27,202 | ) | ||||||
Government grant obligations - | ||||||||||||||||
As of June 30, 2020 | $ | (11,173 | ) | $ | — | $ | (11,173 | ) | $ | — | ||||||
As of September 30, 2019 | $ | — | $ | — | $ | — | $ | — |
(c) | Recent Accounting Pronouncements – |
(d) | Reclassifications – |
3. | Business Combinations |
PRELIMINARY | ||||
Fair value of assets acquired - | ||||
Cash | $ | 5,006 | ||
Accounts receivable | 637 | |||
Inventories | 4,329 | |||
Other current assets | 851 | |||
Property, plant and equipment | 544 | |||
Goodwill | 29,288 | |||
Other intangible assets (estimated useful life): | ||||
Non-compete agreement (5 years) | 120 | |||
Trade name (10 years) | 3,540 | |||
Technology (15 years) | 5,590 | |||
Customer relationships (10 years) | 19,370 | |||
Right-of-use assets | 1,358 | |||
Deferred tax assets, net | 5,566 | |||
76,199 | ||||
Fair value of liabilities assumed - | ||||
Accounts payable and accrued expenses (including current portion of lease and government grant obligations) | 7,757 | |||
Long-term lease obligations | 1,054 | |||
Long-term government grant obligations | 10,792 | |||
Other non-current liabilities | 291 | |||
19,894 | ||||
Total consideration paid (including $8,068 to payoff long-term debt) | $ | 56,305 | ||
(i) | a |
(ii) | one $4,000 installment and o ne $10,000 installment (originally two $10,000 installments contingent upon the achievement of certain product development milestones if achieved by September 30, 2020 and March 31, 2021, ) ; 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. |
PRELIMINARY | ||||
Fair value of assets acquired - | ||||
Accounts receivable | $ | 58 | ||
Inventories | 1,617 | |||
Other current assets | 77 | |||
Property, plant and equipment | 1,520 | |||
Goodwill | 34,482 | |||
Other intangible assets (estimated useful life): | ||||
License agreement (10 years) | 5,990 | |||
Technology (15 years) | 34,040 | |||
Government grant (1.33 years) | 800 | |||
78,584 | ||||
Fair value of liabilities assumed - | ||||
Accounts payable and accrued expenses | 1,082 | |||
Total consideration (including contingent consideration currently estimated at $27,200) | $ | 77,502 | ||
Fair value of assets acquired - | ||||
Accounts receivable | $ | 57 | ||
Inventories | 1,511 | |||
Other current assets | 84 | |||
Property, plant and equipment | 1,424 | |||
Goodwill | 34,582 | |||
Other intangible assets (estimated useful life): | ||||
License agreement (10 years) | 5,990 | |||
Technology (15 years) | 34,136 | |||
Government grant (1.33 years) | 800 | |||
78,584 | ||||
Fair value of liabilities assumed - | ||||
Accounts payable and accrued expenses | 1,058 | |||
Total consideration paid (including contingent C onsideration originally estimated at $27,202) | $ | 77,526 | ||
Three Months | Nine Months | ||||||||||||||
Ended June 30, | Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net Revenues | $ | 48,505 | $ | 51,771 | $ | 150,376 | $ | 160,584 | |||||||
Net Earnings | $ | 3,129 | $ | 2,605 | $ | 11,869 | $ | 7,439 | |||||||
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Net Revenues | $ | 85,083 | $ | 52,319 | $ | 196,978 | $ | 160,887 | ||||||||
Net Earnings | $ | 28,189 | $ | (9 | ) | $ | 39,376 | $ | 5,093 |
Three Months | Nine Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Adjustments to Net Revenues | ||||||||||||||||
GenePOC pre-acquisition revenues | $ | 65 | $ | 34 | $ | 208 | $ | 113 | ||||||||
Adjustments to Net Earnings | ||||||||||||||||
GenePOC pre-acquisition net loss | $ | (3,263 | ) | $ | (3,838 | ) | $ | (9,578 | ) | $ | (9,834 | ) | ||||
Pro forma adjustments: | ||||||||||||||||
Meridian acquisition-related costs | 473 | — | 1,445 | — | ||||||||||||
GenePOC transaction-related costs | 1,245 | — | 1,245 | — | ||||||||||||
Expenses related to non-continuing personnel, locations or activities | 385 | 659 | 1,576 | 1,982 | ||||||||||||
Incremental depreciation and amortization | (585 | ) | (878 | ) | (2,341 | ) | (2,638 | ) | ||||||||
Incremental interest costs | (123 | ) | (211 | ) | (546 | ) | (634 | ) | ||||||||
Tax effects of pro forma adjustments | (82 | ) | 48 | (211 | ) | 148 | ||||||||||
Total Adjustments to Net Earnings | $ | (1,950 | ) | $ | (4,220 | ) | $ | (8,410 | ) | $ | (10,976 | ) |
Three Months Ended | Nine Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Adjustments to Net Revenues | ||||||||||||||||
Exalenz and GenePOC pre-acquisition revenues | $ | 286 | $ | 3,879 | $ | 7,464 | $ | 10,719 | ||||||||
Adjustments to Net Earnings | ||||||||||||||||
Exalenz and GenePOC pre-acquisition net losses | $ | (4,919 | ) | $ | (3,486 | ) | $ | (6,398 | ) | $ | (12,924 | ) | ||||
Pro forma adjustments: | ||||||||||||||||
Meridian acquisition-related costs | 1,641 | — | 3,428 | — | ||||||||||||
Exalenz and GenePOC transaction-related costs | 4,104 | — | 4,550 | — | ||||||||||||
Remove net impact of non-continuing personnel, locations or activities | (447 | ) | 457 | (305 | ) | 2,949 | ||||||||||
Incremental depreciation and amortization | (224 | ) | (1,739 | ) | (2,016 | ) | (4,787 | ) | ||||||||
Incremental interest costs, net | 444 | (599 | ) | (183 | ) | (1,346 | ) | |||||||||
Tax effects of pro forma adjustments and recognizing benefit on resulting Exalenz losses | 83 | 279 | 607 | 922 | ||||||||||||
Total Adjustments to Net Earnings | $ | 682 | $ | (5,088 | ) | $ | (317 | ) | $ | (15,186 | ) | |||||
4. |
June 30, 2019 | September 30, 2018 | |||||||||||||||
Cash and Equivalents | Other Assets | Cash and Equivalents | Other Assets | |||||||||||||
Institutional money market funds | $ | 20,795 | $ | — | $ | 20,421 | $ | — | ||||||||
Cash on hand - | ||||||||||||||||
Restricted | — | — | — | 1,000 | ||||||||||||
Unrestricted | 34,397 | — | 39,342 | — | ||||||||||||
Total | $ | 55,192 | $ | — | $ | 59,763 | $ | 1,000 | ||||||||
June 30, 2019 | September 30, 2018 | |||||||
Raw materials | $ | 8,394 | $ | 6,689 | ||||
Work-in-process | 12,982 | 12,098 | ||||||
Finished goods - instruments | 1,212 | 1,191 | ||||||
Finished goods - kits and reagents | 20,717 | 22,015 | ||||||
Total | $ | 43,305 | $ | 41,993 | ||||
June 30, 2019 | September 30, 2018 | |||||||||||||||
Gross Carrying Value | Accumulated Amortization | Gross Carrying Value | Accumulated Amortization | |||||||||||||
Manufacturing technologies, core products and cell lines | $ | 56,962 | $ | 15,029 | $ | 22,297 | $ | 13,974 | ||||||||
Trade names, licenses and patents | 14,775 | 5,958 | 8,647 | 5,267 | ||||||||||||
Customer lists, customer relationships and supply agreements | 24,377 | 13,899 | 24,461 | 13,051 | ||||||||||||
Government grants | 824 | 51 | — | — | ||||||||||||
Total | $ | 96,938 | $ | 34,937 | $ | 55,405 | $ | 32,292 | ||||||||
Employee Separation and Related Costs | Lease and Other Contract Termination Fees | Other | Total | |||||||||||||
Balance at September 30, 2019 | $ | 1,010 | $ | 12 | $ | 114 | $ | 1,136 | ||||||||
Restructuring charges | 575 | 86 | — | 661 | ||||||||||||
Reversal of prior period accruals | (41 | ) | — | — | (41 | ) | ||||||||||
Payments | (1,515 | ) | (98 | ) | (114 | ) | (1,727 | ) | ||||||||
�� | ||||||||||||||||
Balance at June 30, 2020 | $ | 29 | $ | — | $ | — | $ | 29 | ||||||||
5. | Cash and Equivalents |
June 30, 2020 | September 30, 2019 | |||||||
Institutional money market funds | $ | 1,016 | $ | 20,913 | ||||
Cash on hand, unrestricted | 62,429 | 41,484 | ||||||
Total | $ | 63,445 | $ | 62,397 | ||||
6. | Inventories |
June 30, 2020 | September 30, 2019 | |||||||
Raw materials | $ | 10,712 | $ | 7,455 | ||||
Work-in-process | 17,515 | 11,504 | ||||||
Finished goods - instruments | 2,002 | 935 | ||||||
Finished goods - kits and reagents | 30,239 | 19,723 | ||||||
Total | $ | 60,468 | $ | 39,617 | ||||
7. | Leasing Arrangements |
Three Months Ended June 30, | Nine Months Ended | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||||
Operating cash flows from operating leases | $ | 435 | $ | — | $ | 1,213 | $ | — | ||||||||
June 30, 2020 | ||||
Remainder of 2020 | $ | 522 | ||
2021 | 2,011 | |||
2022 | 1,647 | |||
2023 | 1,179 | |||
2024 | 928 | |||
Thereafter | 916 | |||
Total lease payments | 7,203 | |||
Less amount of lease payment representing interest | (489 | ) | ||
Total present value of lease payments | $ | 6,714 | ||
September 30, 2019 | ||||
2020 | $ | 1,528 | ||
2021 | 1,451 | |||
2022 | 1,293 | |||
2023 | 967 | |||
2024 | 712 | |||
Thereafter | 616 | |||
Total | $ | 6,567 | ||
June 30, 2019 | September 30, 2018 | |||||||
Severance, other termination benefits and related costs | $ | 888 | $ | 987 | ||||
Lease and other contract termination fees | — | 33 | ||||||
Other | — | 6 | ||||||
Total | $ | 888 | $ | 1,026 |
8. |
June 30, 2020 | September 30, 2019 | |||||||||||||||
Gross Carrying Value | Accumulated Amortization | Gross Carrying Value | Accumulated Amortization | |||||||||||||
Manufacturing technologies, core products and cell lines | $ | 61,782 | $ | 17,755 | $ | 56,193 | $ | 15,096 | ||||||||
Trade names, licenses and patents | 18,045 | 7,291 | 14,494 | 6,094 | ||||||||||||
Customer lists, customer relationships and supply agreements | 43,666 | 15,349 | 24,274 | 14,110 | ||||||||||||
Government grants | 794 | 645 | 814 | 232 | ||||||||||||
Non-compete agreements | 120 | 4 | — | — | ||||||||||||
Total | $ | $ | 41,044 | $ | 95,775 | $ | 35,532 | |||||||||
9. | Bank Credit Arrangements |
10. | Reportable Segments and Major Customers Information |
Diagnostics | Life Science | Corporate (1) | Eliminations (2) | Total | ||||||||||||||||
Three Months Ended June 30, 2020 | ||||||||||||||||||||
Net revenues - | ||||||||||||||||||||
Third-party | $ | 21,598 | $ | 63,199 | $ | — | $ | — | $ | 84,797 | ||||||||||
Inter-segment | 86 | 56 | — | (142 | ) | — | ||||||||||||||
Operating income | (2,731 | ) | 40,253 | (2,849 | ) | (8 | ) | 34,665 | ||||||||||||
Goodwill (June 30, 2020) | 99,652 | 18,915 | — | — | 118,567 | |||||||||||||||
Other intangible assets, net (June 30, 2020) | 83,304 | 59 | — | — | 83,363 | |||||||||||||||
Total assets (June 30, 2020) | 303,439 | 116,353 | — | (5 | ) | 419,787 | ||||||||||||||
Three Months Ended June 30, 2019 | ||||||||||||||||||||
Net revenues - | ||||||||||||||||||||
Third-party | $ | 33,118 | $ | 15,322 | $ | — | $ | — | $ | 48,440 | ||||||||||
Inter-segment | 146 | 44 | — | (190 | ) | — | ||||||||||||||
Operating income | 5,731 | 3,639 | (2,929 | ) | 23 | 6,464 | ||||||||||||||
Goodwill (September 30, 2019) | 70,395 | 18,846 | — | — | 89,241 | |||||||||||||||
Other intangible assets, net (September 30, 2019) | 59,807 | 436 | — | — | 60,243 | |||||||||||||||
Total assets (September 30, 2019) | 255,169 | 70,392 | — | (83 | ) | 325,478 | ||||||||||||||
Nine Months Ended June 30, 2020 | ||||||||||||||||||||
Net revenues - | ||||||||||||||||||||
Third-party | $ | 91,331 | $ | 98,183 | $ | — | $ | — | $ | 189,514 | ||||||||||
Inter-segment | 264 | 176 | — | (440 | ) | — | ||||||||||||||
Operating income | 6,469 | 53,182 | (7,832 | ) | 31 | 51,850 | ||||||||||||||
Nine Months Ended June 30, 2019 | ||||||||||||||||||||
Net revenues - | ||||||||||||||||||||
Third-party | $ | 103,283 | $ | 46,885 | $ | — | $ | — | $ | 150,168 | ||||||||||
Inter-segment | 398 | 273 | — | (671 | ) | — | ||||||||||||||
Operating income | 22,330 | 12,906 | (8,450 | ) | 64 | 26,850 | ||||||||||||||
Diagnostics | Life Science | Corporate (1) | Eliminations (2) | Total | ||||||||||||||||
Three Months Ended June 30, 2019 | ||||||||||||||||||||
Net revenues - | ||||||||||||||||||||
Third-party | $ | 33,118 | $ | 15,322 | $ | — | $ | — | $ | 48,440 | ||||||||||
Inter-segment | 146 | 44 | — | (190 | ) | — | ||||||||||||||
Operating income | 5,078 | 4,289 | (2,926 | ) | 23 | 6,464 | ||||||||||||||
Goodwill (June 30, 2019) | 70,943 | 19,164 | — | — | 90,107 | |||||||||||||||
Other intangible assets, net (June 30, 2019) | 61,401 | 600 | — | — | 62,001 | |||||||||||||||
Total assets (June 30, 2019) | 252,575 | 69,242 | — | 619 | 322,436 | |||||||||||||||
Three Months Ended June 30, 2018 | ||||||||||||||||||||
Net revenues - | ||||||||||||||||||||
Third-party | $ | 36,368 | $ | 15,369 | $ | — | $ | — | $ | 51,737 | ||||||||||
Inter-segment | 80 | 96 | — | (176 | ) | — | ||||||||||||||
Operating income | 8,591 | 3,706 | (3,646 | ) | 84 | 8,735 | ||||||||||||||
Goodwill (September 30, 2018) | 35,213 | 19,424 | — | — | 54,637 | |||||||||||||||
Other intangible assets, net (September 30, 2018) | 22,068 | 1,045 | — | — | 23,113 | |||||||||||||||
Total assets (September 30, 2018) | 180,978 | 70,341 | — | 58 | 251,377 | |||||||||||||||
Nine Months Ended June 30, 2019 | ||||||||||||||||||||
Net revenues - | ||||||||||||||||||||
Third-party | $ | 103,283 | $ | 46,885 | $ | — | $ | — | $ | 150,168 | ||||||||||
Inter-segment | 398 | 273 | — | (671 | ) | — | ||||||||||||||
Operating income | 20,455 | 14,781 | (8,450 | ) | 64 | 26,850 | ||||||||||||||
Nine Months Ended June 30, 2018 | ||||||||||||||||||||
Net revenues - | ||||||||||||||||||||
Third-party | $ | 113,640 | $ | 46,831 | $ | — | $ | — | $ | 160,471 | ||||||||||
Inter-segment | 281 | 363 | — | (644 | ) | — | ||||||||||||||
Operating income | 25,701 | 10,286 | (11,744 | ) | 231 | 24,474 |
(1) | Includes Restructuring Costs and |
(2) | Eliminations consist of inter-segment transactions. |
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Segment operating income | $ | 37,514 | $ | 9,393 | $ | 59,682 | $ | 35,300 | ||||||||
Corporate operating expenses | (2,849 | ) | (2,929 | ) | (7,832 | ) | (8,450 | ) | ||||||||
Interest income | 3 | 194 | 137 | 547 | ||||||||||||
Interest expense | (703 | ) | (448 | ) | (2,002 | ) | (1,158 | ) | ||||||||
Other, net | 908 | 268 | 1,561 | (38 | ) | |||||||||||
Consolidated earnings before income taxes | $ | 34,873 | $ | 6,478 | $ | 51,546 | $ | 26,201 | ||||||||
11. | Litigation Matters |
12. | Subsequent Event |
(i) | significantly higher revenue in the Life Science operating segment, due to supplying key molecular components and recombinant antigens to diagnostic test manufacturers for use in COVID-19 related PCR and antibody tests; |
(ii) | higher research and development spending in the Diagnostics segment ($2,337 QTD; $5,068 YTD) under new product development programs; |
(iii) | increased cash-based incentive compensation ($2,327 QTD; $4,897 YTD) tied to higher revenue and profit levels; |
(iv) | increased intangible asset amortization, primarily resulting from purchase accounting amortization related to the acquisitions of Exalenz and the GenePOC business in April 2020 and June 2019, respectively ($996 QTD; $2,711 YTD); |
(v) | increased acquisition-related costs in connection with the fiscal 2020 Exalenz transaction, as compared to those related to the GenePOC transaction in fiscal 2019 ($1,168 QTD; $1,983 YTD); |
(vi) | a decrease in the fair value of the earnout obligation for the acquisition of the GenePOC business ($6,124 QTD; $7,428 YTD); and |
(vii) | higher gains related to foreign currency ($1,042 QTD; $399 YTD), with both periods including an $845 gain realized from the execution of forward currency contracts in connection with the Exalenz acquisition (see Note 3 of the accompanying Condensed Consolidated Financial Statements). |
By Reportable Segment & Geographic Region |
Three Months | Nine Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Operating Expenses - | ||||||||||||||||
U.S. GAAP basis | $ | 21,795 | $ | 23,227 | $ | 62,319 | $ | 74,067 | ||||||||
Acquisition-related costs | (473 | ) | — | (1,445 | ) | — | ||||||||||
Restructuring costs | (1,801 | ) | (913 | ) | (1,701 | ) | (5,105 | ) | ||||||||
Litigation costs | (178 | ) | (1,168 | ) | (1,370 | ) | (3,370 | ) | ||||||||
Adjusted Operating Expenses | $ | 19,343 | $ | 21,146 | $ | 57,803 | $ | 65,592 | ||||||||
Operating Income - | ||||||||||||||||
U.S. GAAP basis | $ | 6,464 | $ | 8,735 | $ | 26,850 | $ | 24,474 | ||||||||
Acquisition-related costs | 473 | — | 1,445 | — | ||||||||||||
Restructuring costs | 1,801 | 913 | 1,701 | 5,105 | ||||||||||||
Litigation costs | 178 | 1,168 | 1,370 | 3,370 | ||||||||||||
Adjusted Operating Income | $ | 8,916 | $ | 10,816 | $ | 31,366 | $ | 32,949 | ||||||||
Net Earnings - | ||||||||||||||||
U.S. GAAP basis | $ | 5,079 | $ | 6,825 | $ | 20,279 | $ | 18,415 | ||||||||
Acquisition-related costs (1) | 363 | — | 1,108 | — | ||||||||||||
Restructuring costs (1) | 1,381 | 685 | 1,305 | 3,737 | ||||||||||||
Litigation costs (1) | 137 | 864 | 1,051 | 2,467 | ||||||||||||
One-time benefit from tax law change | — | (652 | ) | — | (2,347 | ) | ||||||||||
Repatriation transition tax | — | — | — | 854 | ||||||||||||
Adjusted Net Earnings | $ | 6,960 | $ | 7,722 | $ | 23,743 | $ | 23,126 | ||||||||
Net Earnings per Basic Common Share - | ||||||||||||||||
U.S. GAAP basis | $ | 0.12 | $ | 0.16 | $ | 0.48 | $ | 0.44 | ||||||||
Acquisition-related costs | 0.01 | — | 0.03 | — | ||||||||||||
Restructuring costs | 0.03 | 0.02 | 0.03 | 0.09 | ||||||||||||
Litigation costs | — | 0.02 | 0.02 | 0.06 | ||||||||||||
One-time benefit from tax law change | — | (0.02 | ) | — | (0.06 | ) | ||||||||||
Repatriation transition tax | — | — | — | 0.02 | ||||||||||||
Adjusted Basic EPS | $ | 0.16 | $ | 0.18 | $ | 0.56 | $ | 0.55 | ||||||||
Net Earnings per Diluted Common Share - | ||||||||||||||||
U.S. GAAP basis | $ | 0.12 | $ | 0.16 | $ | 0.47 | $ | 0.43 | ||||||||
Acquisition-related costs | 0.01 | — | 0.03 | — | ||||||||||||
Restructuring costs | 0.03 | 0.02 | 0.03 | 0.09 | ||||||||||||
Litigation costs | — | 0.02 | 0.02 | 0.06 | ||||||||||||
One-time benefit from tax law change | — | (0.02 | ) | — | (0.05 | ) | ||||||||||
Repatriation transition tax | — | — | — | 0.02 | ||||||||||||
Adjusted Diluted EPS (2) | $ | 0.16 | $ | 0.18 | $ | 0.55 | $ | 0.54 | ||||||||
- | By Product Platform/Type |
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | |||||||||||||||||||
Gross Profit | $ | 28,259 | $ | 31,962 | (12 | )% | $ | 89,169 | $ | 98,541 | (10 | )% | ||||||||||||
Gross Profit Margin | 58 | % | 62 | % | -4 points | 59 | % | 61 | % | -2 points |
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||
Gross Profit | $ | 55,852 | $ | 28,259 | 98 | % | $ | 117,746 | $ | 89,169 | 32 | % | ||||||||||||
Gross Profit Margin | 66 | % | 58 | % | 8 points | 62 | % | 59 | % | 3 points |
Three Months Ended June 30, 2019 | ||||||||||||||||||||
Research & Development | Selling & Marketing | General & Administrative | Other | Total Operating Expenses | ||||||||||||||||
Fiscal 2018: | ||||||||||||||||||||
Diagnostics | $ | 3,479 | $ | 6,011 | $ | 4,570 | $ | 249 | $ | 14,309 | ||||||||||
Life Science | 785 | 2,491 | 1,996 | — | 5,272 | |||||||||||||||
Corporate | — | — | 1,814 | 1,832 | 3,646 | |||||||||||||||
Total Expenses (2018 Quarter) | $ | 4,264 | $ | 8,502 | $ | 8,380 | $ | 2,081 | $ | 23,227 | ||||||||||
Fiscal 2019: | ||||||||||||||||||||
Diagnostics | $ | 3,855 | $ | 5,525 | $ | 4,483 | $ | 1,372 | $ | 15,235 | ||||||||||
Life Science | 739 | 1,222 | 1,673 | — | 3,634 | |||||||||||||||
Corporate | — | — | 1,846 | 1,080 | 2,926 | |||||||||||||||
Total Expenses (2019 Quarter) | $ | 4,594 | $ | 6,747 | $ | 8,002 | $ | 2,452 | $ | 21,795 | ||||||||||
Nine Months Ended June 30, 2019 | ||||||||||||||||||||
Research & Development | Selling & Marketing | General & Administrative | Other | Total Operating Expenses | ||||||||||||||||
Fiscal 2018: | ||||||||||||||||||||
Diagnostics | $ | 10,904 | $ | 18,537 | $ | 14,472 | $ | 2,447 | $ | 46,360 | ||||||||||
Life Science | 2,255 | 7,426 | 6,282 | — | 15,963 | |||||||||||||||
Corporate | — | — | 5,716 | 6,028 | 11,744 | |||||||||||||||
Total Expenses (2018 Year-to-Date) | $ | 13,159 | $ | 25,963 | $ | 26,470 | $ | 8,475 | $ | 74,067 | ||||||||||
Fiscal 2019: | ||||||||||||||||||||
Diagnostics | $ | 10,141 | $ | 17,048 | $ | 13,507 | $ | 2,219 | $ | 42,915 | ||||||||||
Life Science | 2,153 | 4,173 | 4,603 | 25 | 10,954 | |||||||||||||||
Corporate | — | — | 6,178 | 2,272 | 8,450 | |||||||||||||||
Total Expenses (2019 Year-to-Date) | $ | 12,294 | $ | 21,221 | $ | 24,288 | $ | 4,516 | $ | 62,319 | ||||||||||
Operating Expenses – Comparisons to Prior Year Periods | ||||||||||||||||||||
Three Months Ended June 30, 2019 | ||||||||||||||||||||
Research & Development | Selling & Marketing | General & Administrative | Other | Total Operating Expenses | ||||||||||||||||
2018 Expenses | $ | 4,264 | $ | 8,502 | $ | 8,380 | $ | 2,081 | $ | 23,227 | ||||||||||
% of Revenues | 8 | % | 16 | % | 16 | % | 4 | % | 45 | % | ||||||||||
Fiscal 2019 Increases/(Decreases): | ||||||||||||||||||||
Diagnostics | 376 | (486 | ) | (87 | ) | 1,123 | 926 | |||||||||||||
Life Science | (46 | ) | (1,269 | ) | (323 | ) | — | (1,638 | ) | |||||||||||
Corporate | — | — | 32 | (752 | ) | (720 | ) | |||||||||||||
2019 Expenses | $ | 4,594 | $ | 6,747 | $ | 8,002 | $ | 2,452 | $ | 21,795 | ||||||||||
% of Revenues | 9 | % | 14 | % | 17 | % | 5 | % | 45 | % | ||||||||||
% Increase/(Decrease) | 8 | % | (21 | )% | (5 | )% | 18 | % | (6 | )% |
Three Months Ended June 30, | ||||||||||||||||||||
Research & Development | Selling & Marketing | General & Administrative | Other | Total Operating Expenses | ||||||||||||||||
Fiscal 2019: | ||||||||||||||||||||
Diagnostics | $ | 3,855 | $ | 5,525 | $ | 3,830 | $ | 1,372 | $ | 14,582 | ||||||||||
Life Science | 739 | 1,222 | 2,323 | — | 4,284 | |||||||||||||||
Corporate | — | — | 1,849 | 1,080 | 2,929 | |||||||||||||||
Total Expenses (2019 Quarter) | $ | $ | 6,747 | $ | 8,002 | $ | 2,452 | $ | 21,795 | |||||||||||
Fiscal 2020: | ||||||||||||||||||||
Diagnostics | $ | 6,192 | $ | 4,996 | $ | 7,055 | $ | (4,387 | ) | $ | 13,856 | |||||||||
Life Science | 551 | 1,265 | 2,669 | (3 | ) | 4,482 | ||||||||||||||
Corporate | — | — | 2,715 | 134 | 2,849 | |||||||||||||||
Total Expenses (2020 Quarter) | $ | $ | 6,261 | $ | 12,439 | $ | (4,256 | ) | $ | 21,187 | ||||||||||
Nine Months Ended June 30, | ||||||||||||||||||||
Research & Development | Selling & Marketing | General & Administrative | Other | Total Operating Expenses | ||||||||||||||||
Fiscal 2019: | ||||||||||||||||||||
Diagnostics | $ | 10,141 | $ | 17,048 | $ | 11,632 | $ | 2,219 | $ | 41,040 | ||||||||||
Life Science | 2,153 | 4,173 | 6,478 | 25 | 12,829 | |||||||||||||||
Corporate | — | — | 6,178 | 2,272 | 8,450 | |||||||||||||||
Total Expenses (2019 Year-to-Date) | $ | $ | 21,221 | $ | 24,288 | $ | 4,516 | $ | 62,319 | |||||||||||
Fiscal 2020: | ||||||||||||||||||||
Diagnostics | $ | 15,209 | $ | 15,709 | $ | 17,946 | $ | (3,575 | ) | $ | 45,289 | |||||||||
Life Science | 1,744 | 3,750 | 7,086 | 195 | 12,775 | |||||||||||||||
Corporate | — | — | 6,643 | 1,189 | 7,832 | |||||||||||||||
Total Expenses (2020 Year-to-Date) | $ | $ | 19,459 | $ | 31,675 | $ | (2,191 | ) | $ | 65,896 | ||||||||||
Nine Months Ended June 30, 2019 | ||||||||||||||||||||
Research & Development | Selling & Marketing | General & Administrative | Other | Total Operating Expenses | ||||||||||||||||
2018 Expenses | $ | 13,159 | $ | 25,963 | $ | 26,470 | $ | 8,475 | $ | 74,067 | ||||||||||
% of Revenues | 8 | % | 16 | % | 16 | % | 5 | % | 46 | % | ||||||||||
Fiscal 2019 Increases/(Decreases): | ||||||||||||||||||||
Diagnostics | (763 | ) | (1,489 | ) | (965 | ) | (228 | ) | (3,445 | ) | ||||||||||
Life Science | (102 | ) | (3,253 | ) | (1,679 | ) | 25 | (5,009 | ) | |||||||||||
Corporate | — | — | 462 | (3,756 | ) | (3,294 | ) | |||||||||||||
2019 Expenses | $ | 12,294 | $ | 21,221 | $ | 24,288 | $ | 4,516 | $ | 62,319 | ||||||||||
% of Revenues | 8 | % | 14 | % | 16 | % | 3 | % | 41 | % | ||||||||||
% Decrease | (7 | )% | (18 | )% | (8 | )% | (47 | )% | (16 | )% |
Three Months Ended June 30, | ||||||||||||||||||||
Research & Development | Selling & Marketing | General & Administrative | Other | Total Operating Expenses | ||||||||||||||||
2019 Expenses | $ | $ | 6,747 | $ | 8,002 | $ | 2,452 | $ | 21,795 | |||||||||||
% of Revenues | 9 | % | 14 | % | 17 | % | 5 | % | 45 | % | ||||||||||
Fiscal 2020 Increases/(Decreases): | ||||||||||||||||||||
Diagnostics | 2,337 | (529 | ) | 3,225 | (5,759 | ) | (726 | ) | ||||||||||||
Life Science | (188 | ) | 43 | 346 | (3 | ) | 198 | |||||||||||||
Corporate | — | — | 866 | (946 | ) | (80 | ) | |||||||||||||
2020 Expenses | $ | $ | 6,261 | $ | 12,439 | $ | (4,256 | ) | $ | 21,187 | ||||||||||
% of Revenues | 8 | % | 7 | % | 15 | % | (5 | )% | 25 | % | ||||||||||
% Increase (Decrease) | 47 | % | (7 | )% | 55 | % | (274 | ) % | (3 | ) % |
Nine Months Ended June 30, | ||||||||||||||||||||
Research & Development | Selling & Marketing | General & Administrative | Other | Total Operating Expenses | ||||||||||||||||
2019 Expenses | $ | $ | 21,221 | $ | 24,288 | $ | 4,516 | $ | 62,319 | |||||||||||
% of Revenues | 8 | % | 14 | % | 16 | % | 3 | % | 41 | % | ||||||||||
Fiscal 2020 Increases/(Decreases): | ||||||||||||||||||||
Diagnostics | 5,068 | (1,339 | ) | 6,314 | (5,794 | ) | 4,249 | |||||||||||||
Life Science | (409 | ) | (423 | ) | 608 | 170 | (54 | ) | ||||||||||||
Corporate | — | — | 465 | (1,083 | ) | (618 | ) | |||||||||||||
2020 Expenses | $ | $ | 19,459 | $ | 31,675 | (2,191 | ) | $ | 65,896 | |||||||||||
% of Revenues | 9 | % | 10 | % | 17 | % | (1 | )% | 35 | % | ||||||||||
% Increase (Decrease) | 38 | % | (8 | ) % | 30 | % | (149 | )% | 6 | % |
31.1 | ||||
31.2 | ||||
32 | ||||
101.INS | Inline XBRL Instance Document | |||
101.SCH | Inline XBRL Instance Extension Schema | |||
101.CAL | ||||
101.DEF | Inline XBRL Instance Extension Definition Linkbase | |||
101.LAB | Inline XBRL Instance Extension Label Linkbase | |||
101.PRE | Inline XBRL Instance Extension Presentation Linkbase | |||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and |
MERIDIAN BIOSCIENCE, INC. | |||||||||
Date: August 7, 2020 | By: | /s/ Bryan T. Baldasare | |||||||
Bryan T. Baldasare | |||||||||
(Principal Financial and Accounting Officer) |