Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2016 | Jan. 31, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2016 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | VIVO | |
Entity Registrant Name | MERIDIAN BIOSCIENCE INC | |
Entity Central Index Key | 794,172 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 42,202,397 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
NET REVENUES | $ 46,809 | $ 47,160 |
COST OF SALES | 17,359 | 15,577 |
GROSS PROFIT | 29,450 | 31,583 |
OPERATING EXPENSES | ||
Research and development | 3,405 | 3,381 |
Selling and marketing | 7,514 | 6,443 |
General and administrative | 8,446 | 8,173 |
Total operating expenses | 19,365 | 17,997 |
OPERATING INCOME | 10,085 | 13,586 |
OTHER INCOME (EXPENSE) | ||
Interest income | 22 | 17 |
Interest expense | (423) | |
Other, net | (25) | 96 |
Total other income (expense) | (426) | 113 |
EARNINGS BEFORE INCOME TAXES | 9,659 | 13,699 |
INCOME TAX PROVISION | 3,380 | 4,806 |
NET EARNINGS | $ 6,279 | $ 8,893 |
BASIC EARNINGS PER COMMON SHARE | $ 0.15 | $ 0.21 |
DILUTED EARNINGS PER COMMON SHARE | $ 0.15 | $ 0.21 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC | 42,159 | 41,947 |
EFFECT OF DILUTIVE STOCK OPTIONS AND RESTRICTED SHARE UNITS | 376 | 380 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED | 42,535 | 42,327 |
ANTI-DILUTIVE SECURITIES: | ||
Common share options and restricted share units | 715 | 450 |
DIVIDENDS DECLARED PER COMMON SHARE | $ 0.20 | $ 0.20 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 6,279 | $ 8,893 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | (1,423) | (787) |
Unrealized gain on cash flow hedge | 1,560 | |
Income taxes related to items of other comprehensive income | (589) | |
Other comprehensive income (loss), net of tax | (452) | (787) |
COMPREHENSIVE INCOME | $ 5,827 | $ 8,106 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net earnings | $ 6,279 | $ 8,893 |
Non-cash items included in net earnings: | ||
Depreciation of property, plant and equipment | 1,078 | 896 |
Amortization of intangible assets | 968 | 388 |
Amortization of deferred instrument costs | 257 | 281 |
Stock-based compensation | 1,884 | 1,611 |
Deferred income taxes | 2,091 | 433 |
Change in current assets | 1,616 | (1,186) |
Change in current liabilities | (869) | 834 |
Other, net | (311) | (58) |
Net cash provided by operating activities | 12,993 | 12,092 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property, plant and equipment | (1,392) | (776) |
Purchase of equity method investment | (600) | |
Purchase of intangibles and other assets | (16) | |
Net cash used for investing activities | (1,392) | (1,392) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Dividends paid | (8,440) | (8,407) |
Payment on term loan | (750) | |
Proceeds and tax benefits from exercises of stock options | 301 | 1,470 |
Net cash used for financing activities | (8,889) | (6,937) |
Effect of Exchange Rate Changes on Cash and Equivalents | (662) | (314) |
Net Increase in Cash and Equivalents | 2,050 | 3,449 |
Cash and Equivalents at Beginning of Period | 47,226 | 49,973 |
Cash and Equivalents at End of Period | $ 49,276 | $ 53,422 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2016 |
CURRENT ASSETS | ||
Cash and equivalents | $ 49,276 | $ 47,226 |
Accounts receivable, less allowances of $346 and $334 | 24,278 | 27,102 |
Inventories | 44,709 | 45,057 |
Prepaid expenses and other current assets | 7,785 | 7,406 |
Total current assets | 126,048 | 126,791 |
PROPERTY, PLANT AND EQUIPMENT, at Cost | ||
Land | 1,147 | 1,155 |
Buildings and improvements | 31,595 | 31,487 |
Machinery, equipment and furniture | 45,712 | 45,085 |
Construction in progress | 1,953 | 1,947 |
Subtotal | 80,407 | 79,674 |
Less: accumulated depreciation and amortization | 49,975 | 49,224 |
Net property, plant and equipment | 30,432 | 30,450 |
OTHER ASSETS | ||
Goodwill | 60,705 | 61,982 |
Other intangible assets, net | 29,348 | 29,855 |
Restricted cash | 1,000 | 1,000 |
Deferred instrument costs, net | 1,339 | 1,392 |
Fair value of interest rate swap | 831 | |
Other assets | 352 | 353 |
Total other assets | 93,575 | 94,582 |
TOTAL ASSETS | 250,055 | 251,823 |
CURRENT LIABILITIES | ||
Accounts payable | 7,511 | 7,627 |
Accrued employee compensation costs | 5,064 | 7,106 |
Other accrued expenses | 2,833 | 2,606 |
Current portion of long-term debt | 4,125 | 3,750 |
Income taxes payable | 1,511 | 1,482 |
Total current liabilities | 21,044 | 22,571 |
NON-CURRENT LIABILITIES | ||
Acquisition consideration | 2,383 | 2,383 |
Non-current compensation liabilities | 2,458 | 2,305 |
Fair value of interest rate swap | 729 | |
Long-term debt | 53,495 | 54,610 |
Deferred income taxes | 4,943 | 2,753 |
Total non-current liabilities | 63,279 | 62,780 |
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, 42,202,067 and 42,106,587 shares issued, respectively | 0 | 0 |
Additional paid-in capital | 124,229 | 122,356 |
Retained earnings | 47,471 | 49,632 |
Accumulated other comprehensive loss | (5,968) | (5,516) |
Total shareholders' equity | 165,732 | 166,472 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 250,055 | $ 251,823 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Allowances for accounts receivable | $ 346 | $ 334 |
Preferred stock, par value | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | ||
Common stock, shares authorized | 71,000,000 | 71,000,000 |
Common stock, shares issued | 42,202,067 | 42,106,587 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Changes in Shareholders' Equity (Unaudited) - 3 months ended Dec. 31, 2016 - USD ($) shares in Thousands, $ in Thousands | Total | Common Shares Issued [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Beginning balance at Sep. 30, 2016 | $ 166,472 | $ 122,356 | $ 49,632 | $ (5,516) | |
Beginning balance, Shares at Sep. 30, 2016 | 42,107 | ||||
Cash dividends paid | (8,440) | (8,440) | |||
Exercise of stock options | (11) | (11) | |||
Exercise of stock options, Shares | 18 | ||||
Conversion of restricted share units | 0 | $ 0 | 0 | 0 | 0 |
Conversion of restricted share units, Shares | 77 | ||||
Stock compensation expense | 1,884 | 1,884 | |||
Net earnings | 6,279 | 6,279 | |||
Foreign currency translation adjustment | (1,423) | (1,423) | |||
Hedging activity, net of tax | 971 | 971 | |||
Ending balance at Dec. 31, 2016 | $ 165,732 | $ 124,229 | $ 47,471 | $ (5,968) | |
Ending balance, Shares at Dec. 31, 2016 | 42,202 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The interim condensed consolidated financial statements are unaudited and are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, and the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of Management, the interim financial statements include all normal adjustments and disclosures necessary to present fairly the Company’s financial position as of December 31, 2016, the results of its operations for the three month periods ended December 31, 2016 and 2015, and its cash flows for the three month periods ended December 31, 2016 and 2015. These statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s fiscal 2016 Annual Report on Form 10-K. Financial information as of September 30, 2016 has been derived from the Company’s audited consolidated financial statements. The results of operations for interim periods are not necessarily indicative of the results to be expected for the year. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies A summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of the Company’s fiscal 2016 Annual Report on Form 10-K. Recent Accounting Pronouncements – In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued ASU 2016-02, Leases In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory Issued but not yet effective accounting pronouncements are not expected to have a material impact on the Condensed Consolidated Financial Statements. |
Acquisition of Magellan
Acquisition of Magellan | 3 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisition of Magellan | 3. Acquisition of Magellan On March 24, 2016, we acquired all of the outstanding common stock of Magellan Biosciences, Inc., and its wholly-owned subsidiary Magellan Diagnostics, Inc. (collectively, “Magellan”), for $67,874, utilizing the proceeds from a $60,000 five-year term loan and cash and equivalents on hand. An amount of the acquisition consideration totaling $2,383 remains payable to the sellers, pending the realization of tax benefits for certain net operating loss carryforwards in future tax returns, which is included within non-current liabilities on our Condensed Consolidated Balance Sheet. Headquartered near Boston, Massachusetts, Magellan is a leading manufacturer of FDA-cleared products for the testing of blood to diagnose lead poisoning in children and adults. Magellan is the leading provider of point-of-care lead testing systems in the U.S. Since the consideration paid exceeds the preliminary fair value of the net assets acquired, goodwill in the amount of $40,572 was recorded in connection with this acquisition, none of which will be deductible for tax purposes. This goodwill results largely from the addition of Magellan’s complementary customer base and distribution channels, industry reputation in the U.S. as a leader in lead testing, and management talent and workforce. The Magellan results of operations, which are included in our Condensed Consolidated Statement of Operations for the three months ended December 31, 2016 and reported as part of the Diagnostics operating segment, include $726 of general and administrative expenses related to the depreciation of the fair value adjustment to acquired property, plant and equipment, and the amortization of specific identifiable intangible assets recorded on the opening balance sheet, including customer relationships, technology, non-compete agreements, and trade names. The Company’s consolidated results for the three months ended December 31, 2016 include net revenues and net earnings from Magellan totaling $5,199 and $468, respectively, and reflect the items noted above and exclude interest expense on the debt secured by Meridian in connection with the transaction. The recognized preliminary amounts of identifiable assets acquired and liabilities assumed in the acquisition of Magellan are as follows: PRELIMINARY March 24, (as initially Measurement March 24, (as adjusted) Fair value of assets acquired - Cash and equivalents $ 3,400 $ — $ 3,400 Accounts receivable 1,700 — 1,700 Inventories 1,400 — 1,400 Other current assets 300 — 300 Property, plant and equipment 2,800 (200 ) 2,600 Goodwill 42,800 (2,200 ) 40,600 Other intangible assets (estimated useful life): Customer relationships (15 years) 12,600 300 12,900 Technology (10 years) 10,600 300 10,900 Non-compete agreements (2 years) 700 — 700 Trade names (approximate 9 year weighted average) 3,700 (700 ) 3,000 80,000 (2,500 ) 77,500 Fair value of liabilities assumed - Accounts payable and accrued expenses 1,600 100 1,700 Deferred income tax liabilities 10,600 (2,700 ) 7,900 Total consideration (including $2,400 accrued to be paid; see discussion above) $ 67,800 $ 100 $ 67,900 As indicated, the allocation of the purchase price and estimated useful lives of property, plant and equipment, and intangible assets shown remain preliminary, pending final completion of valuations. The consolidated pro forma results of the combined entities of Meridian and Magellan, had the acquisition date been October 1, 2015, are as follows for the periods indicated: Three Months Ended 2016 2015 Net Revenues $ 46,809 $ 51,095 Net Earnings $ 6,279 $ 8,517 These pro forma amounts have been calculated by including the results of Magellan, and adjusting the combined results to give effect to the following, as if the acquisition had been consummated on October 1, 2015, together with the consequential tax effects thereon: (i) reflect the additional depreciation and amortization that would have been charged in connection with the preliminary fair value adjustments to inventory, property, plant and equipment, and identifiable intangible assets ($869 in the quarter ended December 31, 2015); (ii) reflect equity-based awards granted under the Company’s 2012 Stock Incentive Plan to certain Magellan employees in accordance with executed employment agreements, and to certain Meridian employees to reward them for their efforts in connection with the transaction ($110 in the quarter ended December 31, 2015); and (iii) reflect the interest expense that would have been incurred on the Company’s $60,000 term note ($429 in the quarter ended December 31, 2015). |
Cash and Equivalents
Cash and Equivalents | 3 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Equivalents | 4. Cash and Equivalents Cash and equivalents include the following components: December 31, 2016 September 30, 2016 Cash and Other Cash and Other Overnight repurchase agreements $ 15,628 $ — $ 9,988 $ — Institutional money market funds 10,006 — 10,020 — Cash on hand - Restricted — 1,000 — 1,000 Unrestricted 23,642 — 27,218 — Total $ 49,276 $ 1,000 $ 47,226 $ 1,000 |
Inventories
Inventories | 3 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories Inventories are comprised of the following: December 31, September 30, Raw materials $ 7,642 $ 7,639 Work-in-process 13,535 13,146 Finished goods - instruments 2,113 2,378 Finished goods - kits and reagents 21,419 21,894 Total $ 44,709 $ 45,057 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 6. Intangible Assets A summary of our acquired intangible assets subject to amortization, as of December 31, 2016 and September 30, 2016, is as follows: December 31, 2016 September 30, 2016 Gross Accumulated Gross Accumulated Manufacturing technologies, core products and cell lines $ 22,230 $ 11,800 $ 21,921 $ 11,540 Trade names, licenses and patents 9,035 4,124 9,037 3,947 Customer lists, customer relationships and supply agreements 24,285 10,728 24,385 10,511 Non-compete agreements 720 270 680 170 $ 56,270 $ 26,922 $ 56,023 $ 26,168 The actual aggregate amortization expense for these intangible assets was $968 and $388 for the three months ended December 31, 2016 and 2015, respectively. The estimated aggregate amortization expense for these intangible assets for each of the fiscal years through fiscal 2022 is as follows: remainder of fiscal 2017 – $2,794, fiscal 2018 – $3,524, fiscal 2019 – $3,303, fiscal 2020 – $3,144, fiscal 2021 – $2,560, and fiscal 2022 – $2,164. |
Bank Credit Arrangements
Bank Credit Arrangements | 3 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Bank Credit Arrangements | 7. Bank Credit Arrangements In connection with the acquisition of Magellan (see Note 3), on March 22, 2016 the Company entered into a $60,000 five-year term loan with a commercial bank. The term loan requires quarterly principal and interest payments, with interest at a variable rate tied to LIBOR, and a balloon principal payment due March 31, 2021. The required principal payments on the term loan for each of the five succeeding fiscal years are as follows: remainder of fiscal 2017 – $3,000, fiscal 2018 – $4,500, fiscal 2019 – $5,250, fiscal 2020 – $6,000, and fiscal 2021 – $39,000. In light of the term loan’s interest being determined on a variable rate basis, the fair value of the term loan at December 31, 2016 approximates the current carrying value reflected in the accompanying Condensed Consolidated Balance Sheet. In order to limit exposure to volatility in the LIBOR interest rate, the Company and the commercial bank also entered into an interest rate swap that effectively converts the variable interest rate on the term loan to a fixed rate of 2.76%. With an initial notional balance of $60,000, the interest rate swap has been established with critical terms identical to those of the term loan, including (i) notional reduction amounts and dates; (ii) LIBOR settlement rates; (iii) rate reset dates; and (iv) term/maturity. Due to this, the interest rate swap has been designated as an effective cash flow hedge, with changes in fair value reflected as a separate component of other comprehensive income in the accompanying Condensed Consolidated Statements of Comprehensive Income. At December 31, 2016, the fair value of the interest rate swap was an asset of $831, and is reflected as a non-current asset in the accompanying Condensed Consolidated Balance Sheet. This fair value was determined by reference to a third party valuation, and is considered a Level 2 input within the fair value hierarchy of valuation techniques. In addition, the Company continues to maintain a $30,000 revolving credit facility with a commercial bank, which expires March 31, 2021. There were no borrowings outstanding on this credit facility at December 31, 2016 or September 30, 2016. The term loan and the revolving credit facility are collateralized by the business assets of the Company’s U.S. subsidiaries and require 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 borrowing agreement. As of December 31, 2016, the Company is in compliance with all covenants. The Company is also required to maintain a cash compensating balance with the bank in the amount of $1,000, and is in compliance with this requirement. |
Reportable Segment and Major Cu
Reportable Segment and Major Customers Information | 3 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Reportable Segment and Major Customers Information | 8. Reportable Segment and Major Customers Information Meridian was formed in 1976 and functions as a fully-integrated research, development, manufacturing, marketing, and sales organization with primary emphasis in the fields of infectious disease (in vitro) and blood lead diagnostics and life science. Our principal businesses are (i) the development, manufacture and distribution of diagnostic test kits primarily for gastrointestinal, viral, respiratory, parasitic infectious diseases, and elevated blood lead levels; and (ii) the manufacture and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells, and bioresearch reagents used by researchers and other diagnostic manufacturers. Our reportable segments are Diagnostics and Life Science. The Diagnostics segment consists of manufacturing operations for infectious disease products in Cincinnati, Ohio; Magellan’s 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. This segment’s products are used by hospitals, reference labs and physician offices to detect infectious diseases and elevated lead levels. The Life Science segment consists of manufacturing operations in Memphis, Tennessee; Boca Raton, Florida; London, England; Luckenwalde, Germany; and Sydney, Australia, and the sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells, and bioresearch reagents domestically and abroad, including sales and business development offices in Singapore and Beijing, China to further pursue growing revenue opportunities in Asia. 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-gen sequencing, and plant genotyping and mutation detection, among others). Amounts due from two Diagnostics distributor customers accounted for 12% and 16% of consolidated accounts receivable at December 31, 2016 and September 30, 2016, respectively. Revenues from these two distributor customers accounted for 23% and 39% of the Diagnostics segment third-party revenues during the three months ended December 31, 2016 and 2015, respectively, and represented 17% and 29% of consolidated revenues for the fiscal 2017 and 2016 first quarters, respectively. Within our Life Science segment, two diagnostic manufacturing customers accounted for 19% and 18% of the segment’s third-party revenues during the three months ended December 31, 2016 and 2015, respectively. Segment information for the interim periods is as follows: Diagnostics Life Science Eliminations (1) Total Three Months Ended December 31, 2016 Net revenues - Third-party $ 33,808 $ 13,001 $ — $ 46,809 Inter-segment 79 125 (204 ) — Operating income 6,643 3,267 175 10,085 Goodwill (December 31, 2016) 41,823 18,882 — 60,705 Other intangible assets, net (December 31, 2016) 27,292 2,056 — 29,348 Total assets (December 31, 2016) 184,592 65,525 (62 ) 250,055 Three Months Ended December 31, 2015 Net revenues - Third-party $ 35,301 $ 11,859 $ — $ 47,160 Inter-segment 71 367 (438 ) — Operating income 10,330 3,236 20 13,586 Goodwill (September 30, 2016) 42,608 19,374 — 61,982 Other intangible assets, net (September 30, 2016) 27,534 2,321 — 29,855 Total assets (September 30, 2016) 185,241 66,624 (42 ) 251,823 (1) Eliminations consist of inter-segment transactions. Transactions between segments are accounted for at established intercompany prices for internal and management purposes, with all intercompany amounts eliminated in consolidation. |
Significant Accounting Polici16
Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements – In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued ASU 2016-02, Leases In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory Issued but not yet effective accounting pronouncements are not expected to have a material impact on the Condensed Consolidated Financial Statements. |
Acquisition of Magellan (Tables
Acquisition of Magellan (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Preliminary Amounts of Identifiable Assets Acquired and Liabilities Assumed in Acquisition | The recognized preliminary amounts of identifiable assets acquired and liabilities assumed in the acquisition of Magellan are as follows: PRELIMINARY March 24, (as initially Measurement March 24, (as adjusted) Fair value of assets acquired - Cash and equivalents $ 3,400 $ — $ 3,400 Accounts receivable 1,700 — 1,700 Inventories 1,400 — 1,400 Other current assets 300 — 300 Property, plant and equipment 2,800 (200 ) 2,600 Goodwill 42,800 (2,200 ) 40,600 Other intangible assets (estimated useful life): Customer relationships (15 years) 12,600 300 12,900 Technology (10 years) 10,600 300 10,900 Non-compete agreements (2 years) 700 — 700 Trade names (approximate 9 year weighted average) 3,700 (700 ) 3,000 80,000 (2,500 ) 77,500 Fair value of liabilities assumed - Accounts payable and accrued expenses 1,600 100 1,700 Deferred income tax liabilities 10,600 (2,700 ) 7,900 Total consideration (including $2,400 accrued to be paid; see discussion above) $ 67,800 $ 100 $ 67,900 |
Business Acquisition, Pro Forma Information | The consolidated pro forma results of the combined entities of Meridian and Magellan, had the acquisition date been October 1, 2015, are as follows for the periods indicated: Three Months Ended 2016 2015 Net Revenues $ 46,809 $ 51,095 Net Earnings $ 6,279 $ 8,517 |
Cash and Equivalents (Tables)
Cash and Equivalents (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Components of Cash and Cash Equivalents | Cash and equivalents include the following components: December 31, 2016 September 30, 2016 Cash and Other Cash and Other Overnight repurchase agreements $ 15,628 $ — $ 9,988 $ — Institutional money market funds 10,006 — 10,020 — Cash on hand - Restricted — 1,000 — 1,000 Unrestricted 23,642 — 27,218 — Total $ 49,276 $ 1,000 $ 47,226 $ 1,000 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories are comprised of the following: December 31, September 30, Raw materials $ 7,642 $ 7,639 Work-in-process 13,535 13,146 Finished goods - instruments 2,113 2,378 Finished goods - kits and reagents 21,419 21,894 Total $ 44,709 $ 45,057 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Acquired Intangible Assets Subject to Amortization | A summary of our acquired intangible assets subject to amortization, as of December 31, 2016 and September 30, 2016, is as follows: December 31, 2016 September 30, 2016 Gross Accumulated Gross Accumulated Manufacturing technologies, core products and cell lines $ 22,230 $ 11,800 $ 21,921 $ 11,540 Trade names, licenses and patents 9,035 4,124 9,037 3,947 Customer lists, customer relationships and supply agreements 24,285 10,728 24,385 10,511 Non-compete agreements 720 270 680 170 $ 56,270 $ 26,922 $ 56,023 $ 26,168 |
Reportable Segment and Major 21
Reportable Segment and Major Customers Information (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment information for the interim periods is as follows: Diagnostics Life Science Eliminations (1) Total Three Months Ended December 31, 2016 Net revenues - Third-party $ 33,808 $ 13,001 $ — $ 46,809 Inter-segment 79 125 (204 ) — Operating income 6,643 3,267 175 10,085 Goodwill (December 31, 2016) 41,823 18,882 — 60,705 Other intangible assets, net (December 31, 2016) 27,292 2,056 — 29,348 Total assets (December 31, 2016) 184,592 65,525 (62 ) 250,055 Three Months Ended December 31, 2015 Net revenues - Third-party $ 35,301 $ 11,859 $ — $ 47,160 Inter-segment 71 367 (438 ) — Operating income 10,330 3,236 20 13,586 Goodwill (September 30, 2016) 42,608 19,374 — 61,982 Other intangible assets, net (September 30, 2016) 27,534 2,321 — 29,855 Total assets (September 30, 2016) 185,241 66,624 (42 ) 251,823 (1) Eliminations consist of inter-segment transactions. |
Acquisition of Magellan- Additi
Acquisition of Magellan- Additional Information (Detail) - USD ($) $ in Thousands | Mar. 24, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | Mar. 22, 2016 | Oct. 01, 2015 |
Business Acquisition [Line Items] | ||||||
Acquisition consideration payable | $ 2,383 | $ 2,383 | ||||
Goodwill | 60,705 | $ 61,982 | ||||
General and administrative | 8,446 | $ 8,173 | ||||
NET REVENUES | 46,809 | 47,160 | ||||
Net earnings | 6,279 | 8,893 | ||||
Interest expense | 423 | |||||
Magellan [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Total consideration paid | $ 67,874 | |||||
Acquisition consideration payable | 2,400 | |||||
Goodwill | 40,600 | |||||
General and administrative | 726 | |||||
NET REVENUES | 5,199 | |||||
Net earnings | $ 468 | |||||
Term loan | $ 60,000 | |||||
Magellan [Member] | Other Noncurrent Liabilities [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition consideration payable | 2,383 | |||||
Magellan [Member] | Pro Forma [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Fair value adjustments to inventory, property, plant and equipment and identifiable intangible assets | 869 | |||||
Equity-based awards granted | 110 | |||||
Interest expense | $ 429 | |||||
Magellan [Member] | Five - Year Term Loan [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from term loan | $ 60,000 | |||||
Term loan | $ 60,000 |
Acquisition of Magellan - Sched
Acquisition of Magellan - Schedule of Preliminary Amounts of Identifiable Assets Acquired and Liabilities Assumed in Acquisition (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2016 | Mar. 24, 2016 |
Fair value of assets acquired - | |||
Goodwill | $ 60,705 | $ 61,982 | |
Magellan [Member] | |||
Fair value of assets acquired - | |||
Cash and equivalents | $ 3,400 | ||
Accounts receivable | 1,700 | ||
Inventories | 1,400 | ||
Other current assets | 300 | ||
Property, plant and equipment | 2,600 | ||
Goodwill | 40,600 | ||
Other intangible assets: | |||
Fair value of assets acquired net | 77,500 | ||
Fair value of liabilities assumed - | |||
Accounts payable and accrued expenses | 1,700 | ||
Deferred income tax liabilities | 7,900 | ||
Total consideration | 67,900 | ||
Magellan [Member] | As Initially Reported [Member] | |||
Fair value of assets acquired - | |||
Cash and equivalents | 3,400 | ||
Accounts receivable | 1,700 | ||
Inventories | 1,400 | ||
Other current assets | 300 | ||
Property, plant and equipment | 2,800 | ||
Goodwill | 42,800 | ||
Other intangible assets: | |||
Fair value of assets acquired net | 80,000 | ||
Fair value of liabilities assumed - | |||
Accounts payable and accrued expenses | 1,600 | ||
Deferred income tax liabilities | 10,600 | ||
Total consideration | 67,800 | ||
Magellan [Member] | Measurement Period Adjustments [Member] | |||
Fair value of assets acquired - | |||
Property, plant and equipment | (200) | ||
Goodwill | (2,200) | ||
Other intangible assets: | |||
Fair value of assets acquired net | (2,500) | ||
Fair value of liabilities assumed - | |||
Accounts payable and accrued expenses | 100 | ||
Deferred income tax liabilities | (2,700) | ||
Total consideration | 100 | ||
Magellan [Member] | Customer Relationships [Member] | |||
Other intangible assets: | |||
Other intangible assets | 12,900 | ||
Magellan [Member] | Customer Relationships [Member] | As Initially Reported [Member] | |||
Other intangible assets: | |||
Other intangible assets | 12,600 | ||
Magellan [Member] | Customer Relationships [Member] | Measurement Period Adjustments [Member] | |||
Other intangible assets: | |||
Other intangible assets | 300 | ||
Magellan [Member] | Technology [Member] | |||
Other intangible assets: | |||
Other intangible assets | 10,900 | ||
Magellan [Member] | Technology [Member] | As Initially Reported [Member] | |||
Other intangible assets: | |||
Other intangible assets | 10,600 | ||
Magellan [Member] | Technology [Member] | Measurement Period Adjustments [Member] | |||
Other intangible assets: | |||
Other intangible assets | 300 | ||
Magellan [Member] | Non-Compete Agreements [Member] | |||
Other intangible assets: | |||
Other intangible assets | 700 | ||
Magellan [Member] | Non-Compete Agreements [Member] | As Initially Reported [Member] | |||
Other intangible assets: | |||
Other intangible assets | 700 | ||
Magellan [Member] | Trade Names [Member] | |||
Other intangible assets: | |||
Other intangible assets | 3,000 | ||
Magellan [Member] | Trade Names [Member] | As Initially Reported [Member] | |||
Other intangible assets: | |||
Other intangible assets | 3,700 | ||
Magellan [Member] | Trade Names [Member] | Measurement Period Adjustments [Member] | |||
Other intangible assets: | |||
Other intangible assets | $ (700) |
Acquisition of Magellan - Sch24
Acquisition of Magellan - Schedule of Preliminary Amounts of Identifiable Assets Acquired and Liabilities Assumed in Acquisition (Parenthetical) (Detail) - USD ($) $ in Thousands | Mar. 24, 2016 | Dec. 31, 2016 | Sep. 30, 2016 |
Business Acquisition [Line Items] | |||
Acquisition consideration payable | $ 2,383 | $ 2,383 | |
Magellan [Member] | |||
Business Acquisition [Line Items] | |||
Acquisition consideration payable | $ 2,400 | ||
Magellan [Member] | As Initially Reported [Member] | |||
Business Acquisition [Line Items] | |||
Acquisition consideration payable | $ 2,400 | ||
Magellan [Member] | Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Estimated useful life | 15 years | ||
Magellan [Member] | Customer Relationships [Member] | As Initially Reported [Member] | |||
Business Acquisition [Line Items] | |||
Estimated useful life | 15 years | ||
Magellan [Member] | Technology [Member] | |||
Business Acquisition [Line Items] | |||
Estimated useful life | 10 years | ||
Magellan [Member] | Technology [Member] | As Initially Reported [Member] | |||
Business Acquisition [Line Items] | |||
Estimated useful life | 10 years | ||
Magellan [Member] | Non-Compete Agreements [Member] | |||
Business Acquisition [Line Items] | |||
Estimated useful life | 2 years | ||
Magellan [Member] | Non-Compete Agreements [Member] | As Initially Reported [Member] | |||
Business Acquisition [Line Items] | |||
Estimated useful life | 2 years | ||
Magellan [Member] | Trade Names [Member] | |||
Business Acquisition [Line Items] | |||
Estimated weighted average useful life | 9 years | ||
Magellan [Member] | Trade Names [Member] | As Initially Reported [Member] | |||
Business Acquisition [Line Items] | |||
Estimated weighted average useful life | 9 years |
Acquisition of Magellan - Busin
Acquisition of Magellan - Business Acquisition, Pro Forma Information (Detail) - Magellan [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||
Net Revenues | $ 46,809 | $ 51,095 |
Net Earnings | $ 6,279 | $ 8,517 |
Cash and Equivalents - Componen
Cash and Equivalents - Components of Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 49,276 | $ 47,226 | $ 53,422 | $ 49,973 |
Overnight Repurchase Agreements [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 15,628 | 9,988 | ||
Institutional Money Market Funds [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 10,006 | 10,020 | ||
Cash [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 23,642 | 27,218 | ||
Cash and Equivalents [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 1,000 | 1,000 | ||
Cash and Equivalents [Member] | Other Restricted Cash [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 1,000 | $ 1,000 |
Inventories - Components of Inv
Inventories - Components of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2016 |
Inventory [Line Items] | ||
Raw materials | $ 7,642 | $ 7,639 |
Work-in-process | 13,535 | 13,146 |
Total | 44,709 | 45,057 |
Instruments [Member] | ||
Inventory [Line Items] | ||
Finished goods | 2,113 | 2,378 |
Kits and Reagents [Member] | ||
Inventory [Line Items] | ||
Finished goods | $ 21,419 | $ 21,894 |
Intangible Assets - Summary of
Intangible Assets - Summary of Acquired Intangible Assets Subject to Amortization (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 56,270 | $ 56,023 |
Accumulated Amortization | 26,922 | 26,168 |
Manufacturing Technologies, Core Products and Cell Lines [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 22,230 | 21,921 |
Accumulated Amortization | 11,800 | 11,540 |
Trade Names, Licenses and Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 9,035 | 9,037 |
Accumulated Amortization | 4,124 | 3,947 |
Customer Lists, Customer Relationships, and Supply Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 24,285 | 24,385 |
Accumulated Amortization | 10,728 | 10,511 |
Non-Compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 720 | 680 |
Accumulated Amortization | $ 270 | $ 170 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 968 | $ 388 |
Estimated amortization expense for intangible assets remainder of fiscal year 2017 | 2,794 | |
2,018 | 3,524 | |
2,019 | 3,303 | |
2,020 | 3,144 | |
2,021 | 2,560 | |
2,022 | $ 2,164 |
Bank Credit Arrangements - Addi
Bank Credit Arrangements - Additional Information (Detail) - USD ($) | 3 Months Ended | |||
Dec. 31, 2016 | Sep. 30, 2016 | Mar. 22, 2016 | Oct. 01, 2015 | |
Debt Instrument [Line Items] | ||||
Notional balance | $ 60,000,000 | |||
Interest rate swap description | (i) notional reduction amounts and dates; (ii) LIBOR settlement rates; (iii) rate reset dates; and (iv) term/maturity. | |||
Interest rate swap asset | $ 831,000 | |||
Bank credit arrangement, fixed interest rate percentage | 2.76% | |||
Credit facility with a commercial bank | $ 30,000,000 | |||
Expiration date of credit facility | Mar. 31, 2021 | |||
Borrowings outstanding under credit facility | $ 0 | $ 0 | ||
Cash compensating balance | 1,000,000 | |||
Magellan [Member] | ||||
Debt Instrument [Line Items] | ||||
Term loan | $ 60,000,000 | |||
2,017 | 3,000,000 | |||
2,018 | 4,500,000 | |||
2,019 | 5,250,000 | |||
2,020 | 6,000,000 | |||
2,021 | $ 39,000,000 | |||
Five - Year Term Loan [Member] | Magellan [Member] | ||||
Debt Instrument [Line Items] | ||||
Term loan | $ 60,000,000 |
Reportable Segment and Major 31
Reportable Segment and Major Customers Information - Additional Information (Detail) - Customer Concentration Risk [Member] - Customer | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | |
Two Diagnostic Distributor Customers [Member] | Consolidated Accounts Receivable [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Number of major customers | 2 | 2 | |
Concentration risk percentage | 12.00% | 16.00% | |
Two Diagnostic Distributor Customers [Member] | Segment, Third-Party Sales Revenue [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Number of major customers | 2 | 2 | |
Two Diagnostic Distributor Customers [Member] | Segment, Third-Party Sales Revenue [Member] | Diagnostics [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk percentage | 23.00% | 39.00% | |
Two Diagnostic Distributor Customers [Member] | Revenues [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk percentage | 17.00% | 29.00% | |
Two Diagnostic Manufacturing Customers [Member] | Segment, Third-Party Sales Revenue [Member] | Life Science [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Number of major customers | 2 | 2 | |
Concentration risk percentage | 19.00% | 18.00% |
Reportable Segments and Major C
Reportable Segments and Major Customers Information - Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||
NET REVENUES | $ 46,809 | $ 47,160 | |
Operating income | 10,085 | 13,586 | |
Goodwill | 60,705 | $ 61,982 | |
Other intangible assets, net | 29,348 | 29,855 | |
Total assets | 250,055 | 251,823 | |
Operating Segments [Member] | Diagnostics [Member] | |||
Segment Reporting Information [Line Items] | |||
NET REVENUES | 33,808 | 35,301 | |
Operating income | 6,643 | 10,330 | |
Goodwill | 41,823 | 42,608 | |
Other intangible assets, net | 27,292 | 27,534 | |
Total assets | 184,592 | 185,241 | |
Net revenues | 79 | 71 | |
Operating Segments [Member] | Life Science [Member] | |||
Segment Reporting Information [Line Items] | |||
NET REVENUES | 13,001 | 11,859 | |
Operating income | 3,267 | 3,236 | |
Goodwill | 18,882 | 19,374 | |
Other intangible assets, net | 2,056 | 2,321 | |
Total assets | 65,525 | 66,624 | |
Net revenues | 125 | 367 | |
Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating income | 175 | 20 | |
Total assets | (62) | $ (42) | |
Net revenues | $ (204) | $ (438) |