VIVO - Earnings call transcript Q2 2021 | Meridian Bioscience Inc.

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Operator

Good afternoon, and thank you for standing by. Welcome to the Meridian Bioscience Fiscal Second Quarter 2021 Earnings Conference Call. [Operator Instructions].

Now I would like to hand the call over to Vice President of Investor Relations, Charlie Wood. Please go ahead.

Charles Wood

Holly. you, Thank welcome Call. and Fiscal Second XXXX Good to Earnings Quarter morning, Meridian's With Officer; Chief Chief Kenny, me Jack are Executive Financial and Officer. Baldasare, Bryan slides are Please accompany at that our filings, release note SEC investor.meridianbioscience.com. this on available and call our website earnings to

post William prepared after in We Xrd, on X Blair With Growth a the be will and of Conference calendar, on dates. Healthcare I Jefferies to participating our Conference the to Jack copy will Bryan participating call. these will same remarks regards in be and the June those

QX scheduled XXXX X, Our fiscal Friday, earnings call currently XXXX. for is August

we the me company's Before remind and forward-looking include the statements. presentation let today, remarks you begin that

those affected company's no as forward-looking to are May in publicly described numerous Forward-looking subject differ control, projected. these statements post XXXX, in particular, many of materially time related risks risks to note, them. pandemic. update of may outlook and and makes to company's company's these from results COVID-XX undertakes uncertainties, The and uncertainties SEC risks the by beyond pandemic X, filings. time statements that And and Meridian including the the from which be obligation today, are may statements to

an the included most with refer related other in basis. Additionally, Jack. net measures operating will on GAAP income, diluted Reconciliations are specifically earnings per financial throughout operating of comparable release. non-GAAP to over the and this measures adjusted now our we I financial measures to each turn discussion share, margin, presentation, these non-GAAP operating expenses, directly call net earnings and earnings

John Kenny

deeper for the diagnostics the start quarter science rebound strong the will for the continued our go will life highlights into and of remained you, Thank products the financials QX the in Charlie. another quarter. operational I call, I Bryan later some headwinds for and from with let to of high pandemic. Meridian. was Demand

further requested announcements, study In prior we a we our significantly the showed than aware Limit Detection as studies application a are the analysis. As some bridging you saw conducted of setback as EUA initial FDA. Revogene by our of Detection which the conduct withdrew assay from Limit SARS-CoV-X a better March, to

for the While is we the needed FDA. that of news conduct positive validation before resubmit also the further assay, performance the this we it clinical to assay can to studies meant

We anticipate quarter. the Québec ramp June. production a were the validation in we've production to end shifts expect the begin on of our running maximum manufacturing month, our to to validation we our capacity Manufacturing studies our up by October anticipate X since to revisions application assay, Revogene initial needs. of based been volume the on At clinical fourth lines for lots complete the the Cincinnati of in line We first later RADx our and second outlook initiative resubmitting the followed last on the fiscal manufacturing remains production second awarded on by EUA for June. happening in this new with SARS-CoV-X from of site, million assay. and processes the grant expect $X.X some Related track expansion year

platform Curian performer a to Revogene the we slowdown the instruments, to diagnostic On the LeadCare wait saw quarter, adopted of SARS-CoV-X submitted orders another work for campylobacter assay This significant team to toward team a submission milestone the of second hit EUA we Campy of here our a look detects a and the and pending the stool. platform we our installed Curian to Cincinnati, is resubmission immunoassay future. from XXX, our XXX(k) strongest quarter, we last year-over-year which day assay by the Commercially, in this the for installed our the and additional to announcing Congratulations for a FDA R&D total, to in with bringing the team installs. the of human system, in and assay. in forward while attribute the XX backlog temporary was base of customers, application approach continue the see assay. have in current we In posting net Revogene submissions growth.

Additionally, appears headwinds recovered were are of optimistic quarter. the first XXXX that expectations that pandemic, from of business behind. XX% products and far the other not installs on the and path for fully of LeadCare a similar II blood second It are the from up our the ahead consecutive quarter chemistry we the core and has

Science for was mix, the the DNA the strong customer trying whether and optimized Besides ability In future use the specific or A by to sample other the with the had manufacture are assays. blood, they This qPCR team whole screening Life blood The its reduce with DNA coupled detection Air-Dryable of a or offering developments. customers our Direct also crude, assays March, designed Mixes. the segment. assay development exciting samples, launched Blood what is product want cancer for mixes Life to Mix specifically assay Master molecular development sample to and can approach quarter, the drive the Turning of compatibility to simplifying develop manufacturing and in Science only serum financial some will It's first unique the for air the operational needs what RNA-based crude with know to develop. design our extraction. type samples to to facilitate part assay accelerate use they and be. our that without costs for the for of need performance plasma

and in appropriate time. to world expected teams. both ultimately development They quarter benefit development probes and Overall, the new optimized reduce assays more the our is the overall We them norm. to will add approach where will productive really the their mix. COVID should post point This new primers for of be rapid a customers

to who Bryan, results the over will call talk quarter. financial the the hand I'll about Now of

Bryan Baldasare

Thank you, Jack.

from another and in his was weakness up Science million, strong the driven Life the offset QX mentioned in strong by revenues partially We category $XX As company. diagnostics. quarter by for remarks, of respiratory segment performance opening consolidated the year-over-year recorded of the XX% Jack

On Excluding from the quarter, XX%. the driven of for 'XX. prior rate basis, the our year-over-year currency $XX including impact 'XX over in was expenses operating scale to was million GAAP the up was result a as well year. compared the in an second strong as increase million, story basis, expenses margin XX% fiscal in incentive the to particularly as and from million. programs. contributed little On of $XX U.S. quarter in incremental primarily income for sharing million of with Science were up profit be accounting acquisition, of growth XX% versus improvements reagents. $X.XX purchase for primarily molecular up XX% for changes, operating revenues quarter XX% of were second this margin or was of year. a margin Adjusted molecular award in quarter gross by Consolidated The basis, approximately exchange continues expenses 'XX. by $X.XX, adjusted was first the of from Life foreign our of million million driven $XX quarter income a of Also same as revenues The the a $XX Sales equity profit were adjusted quarters, on with last of diluted an operating amortization economies quarter of second year-over-year. fiscal Exalenz consolidated EPS XXX% with $X XX% the XX% $XX non-GAAP added approximately operating fiscal reagents last earnings compensation, by gross increase net expenses second operating

diluted In decrease is by related in operating expense selected our to addition $X to million acquisition was EPS $XX and $X.XX. GenePOC. GAAP million net aforementioned $X operating in earnings expenses contingent consideration the million spending legal the a of drivers, were that GAAP offset include obligation GAAP

for our Except the our pandemic. expectations business, Revogene to the and respiratory was the operating growth down trend X% X% in approximately SARS-CoV-X and of from year-over-year. during but down respiratory points at let's continuing to same Diagnostics posting that is was segment contributor from provisions Exalenz almost $XX from it The of QX as also voluntary margin note important QX, year-over-year, blood revenues XX%, a reserve a segments. incremental was lows light Now delivered 'XX. blood of look with QX of our near well this the primarily our performed up XX% driven chemistry, was COVID-XX BreathID, quarter our that down product-related application. testing, by in the by not inventory year. products for decline affected the by diagnostics was was million GI X the from were until from season margin from chemistry recovery as basis EUA year-over-year, closed basis it of antigen other profit while last antibody GI up tests and the outside XXX X% rapid of Gross withdrawal fiscal parts the test points XXX for approximately QX adversely which we very details driven acquisition major

result investment spending of $X.X higher the which prior adjusted just we prior the costs including were from programs asset for than adjusted In continued of on had sales to million less antigen in of continued up addition new addition, loss in amortization. lower pressure pylori mentioned. new affected reserve product an intangible similar driven products, the commercial absorbed our on the pricing the provisions operating excellence year-over-year product in this including on decrease to have our inventory despite the by by operating margin a Diagnostics expenses is trials, development I volumes and also levels programs, was driven an H. sales and development quarters. quarters, acquisition Exalenz, by stool basis year-over-year, mentioned clinical lower and million quarter Diagnostics $X

estimate the year-over-year as built to pandemic Gross well economies as the customer profit non for X,XXX revenues driven quarter, increase margin core of be from Science was an that points million, million. products. we Of up $XX XXX% QX basis up suggests molecular of products initial by XX% This $XX from picked Life COVID-XX was recognized impact estimate revenue last XX% new COVID the this our relationships segment revenue core Our was We up the year. note, business. from of scale continues highlighting business year-over-year. over our of recovery of we in from during

was The income scale. saw $X.X first $XX was such operating operating second quarter of at continuing million. in when XX% this a large of margin to a COVID-XX, the brings a to leverage 'XX million, revenue modest we business which the Adjusted fiscal related demonstrate

Turning to sheet. the balance

a line of million in $XXX under March a borrowing of our capacity of we $XX credit. XX, As million cash had $XXX million and

not will reduce repaid During debt due the facility. remaining At revolving we quarter, swaps on we balance $X on further point, our rate our interest we have credit can you the million this to the portion. expect

Turning to guidance.

our partner the a continue given clearance we and we assay, in explore our the quarter, for antigen an delay had the from EUA partner. options in of cleared test, delay submission Revogene During SARS-CoV-X rapid continued to of current other timing

finished behind demand rollout quarter Science orders as Life thus slowed and at mirroring a net the Life time. decline as the Science are Science maintaining accelerated. see the good this Despite Life March, segment testing guidance that, our little revenues vaccine Additionally, expectations for in our seen reagents our customer still we

application of our voluntary of resubmission. SARS-CoV-X EUA and Revogene result of timing a our As expected withdrawal

test are partner no million when guidance adjusted diluted the we remove of for EPS SARS-CoV-X diagnostics our As revenues the to consolidated our reduced revenue corresponding during as current rapid line tests significant to well net clear expectations reflecting of antigen between $XX no revenue $X.XX reaffirmation Science in $XXX million 'XX. clearance, EUA $XXX will of million. second diagnostics of and sight based million segment revenues $XXX contribution adjusted these $XXX now between and expectations We lowering any assumes EPS of million submit its million pandemic. and from fiscal of and $XXX contribution and XX.X expect to sight of by million, half direction million This Flowing the between our on $XXX through there of a $XX count $X.XX and between current change is reflects the million line the in reduction dramatic into of diluted order fully and results guidance that of that share patterns shares. same as Life

quarter. that set beginning range above lower guidance And end the a this of last of at back lower, to hand While range call the the the I the will over with still guidance the year, still overlaps guidance Jack. now set is

John Kenny

The Revogene continues. Thanks, Despite product and developed Meridian. pleased SARS-CoV-X Bryan. great an Overall, on assay, advance which high-quality geographies. development continues planned the with as maximizing The step for Diagnostics regulatory path for results Life next continue important shots to for the for team panel respiratory deliver a is completion of along Science. setback towards year. to goal of quarter climb our strong we submitting continues the the target product timing to of new a assays continues on the their clearance to customers shots the strategy in has number recovery are

of excited pipelines the to normal including those assays the our that need. of the address to for some We customers' are return testing in at point shift

COVID-XX testing be be market level, continued lower this While in with at settling will long a appears in tail. believe to a durability there we

antigen, testing and industry our moves situated solutions comprehensive to Our Life with for symptomatic testing, antibody as reagents including provide well Science the business molecular. of to point-of-care to is offering it asymptomatic from SARS-CoV-X

post for a transition future of we COVID have As the into we Meridian. significant optimism begin world, the

segment much larger the future with growth. and and and on and Diagnostics Life of despite to the transformed our segment customer the Our by new not headwinds relationships a the Science reduce exits investment We pandemic. strategy base fortified was pandemic fuel kept did

As to the positioned at continue is return year ago. to sustainable the growth normal, X was of diagnostics that cusp testing continues to turnaround

questions, Meridian open I balance Bryan any for questions have you work our We both appreciate put story. to and sheet, are have. significant can Holly, adding And interest your We you sheet here strong to please? in to balance up cash, growth generated that to for looking continued now we answer continue for already opportunities. will our ways inorganic it and the organic and

Operator

is of Andrew going Blair. [Operator come Instructions]. question with Brackmann our the to first And from line William

Andrew Brackmann

that think March, the maintaining that Life for for guidance can And maybe confidence of started that you start I that? the What the balance maybe here you're that that? to Maybe in on but in the guidance maintaining bit confidence the gives buildup sort gives talk you of Sciences slow you noted order a Bryan, of the to year. year, in sort about full maintaining book and that of the little you

John Kenny

and then think certainly primary in So what the has to Andrew, Kind that I type or hospital-based Andrew, type reason, United all more States can what of that moving I like think of and saw around noted testing, March. out. that, wrap last we back the the I'll we've start testing in really started to level was range summer it that's it. Bryan symptomatic of in

people based However, of would of different won't We're a they still They molecular the a and things. QX the because still were process is goal, we that seeing don't shots they're number to product, on more the of QX would in like key and of they add have that are a are why have that opportunities say speak. to strong, to Bryan, we we but big a from levels testing, the where of continue. I strong that. lot our lot standpoint, if have I we in in And orders, significant. antigen very feel number difference activity say, good EUA at want as so and that, But the regards we to be testing. we know I based one you a antigen is COVID have continue using

Bryan Baldasare

symptomatic both that work would add The thing I to that, reagent and in is products our channels. only Andrew, other asymptomatic

we So half feel year of that's good that's maintaining about our guidance. we -- -- and the the back feel again, reason the

Andrew Brackmann

Science and your think of sort your winds XXXX Sort on with strategy the much Meridian pandemic? at year Perfect. of pandemic all than it sort core Is on side business? fair single entering together exiting to the to diagnostics. high maintaining the is on of transformation starts comments, the in come And Life did this in really in the it the cross about mind a sort then, the that of better you sort excluding underlying mid- a you to talked that of closing saw that where Jack, of digits and in basis, than position how grows the

John Kenny

assessment. is to momentum. acquisition with to core. starting Exalenz continue able wanting finally that's to the way testing reps XXXX, you The get customers, back our some have that would say, like that of gain into in flare than does just doesn't back when I in crazy assumption being now we The they're things being of Andrew, that, a front seen continual improvement up fair COVID about talk -- We're sales in Yes. out COVID. get other and

the so And activity in starting product. like lot a we're to see more products BreathID

Science a And leverage. certainly we picked anticipate new built think that go testing we the side, because a we on Life will business base forward millions do Science can And to we rebound and Life at as larger good COVID but worth up will business. of dollars' of the the diagnostic of of we be because much start so continue, relationships that,

optimistic end improvement stronger we're that see a of business larger, Life So on in much back this. Science diagnostics the and you'll us

Andrew Brackmann

then And Perfect. for last one me.

be balance of allocation that that additional You be of And organic should you mentioned into that terms capital in sort the of your anything relates then it we year? about at have in of half sort back this of script. year investments of the should the to 'XX? there aware How as planned we and of inorganic for thinking the end means

John Kenny

if start, So changed. Bryan, you say, wrap I you that hasn't want. strategy Andrew, around would I'll can our

are build to use look we're at Meridian. the a going generating opportunities to that to We cash stronger

R&D. levels high continuing are We of

side at you'll diagnostic continue then as high Life acquisition, investment of And that I ahead Exalenz side. we're before. sales, operations the believe going fortunate both we've see side Science thing think you the were the into to will, and when kept keeping in We well high, from was the remains back do. the our did the it look So if at we we organic and We looked last percentages right R&D year. bolt-on funded us to with that. We opportunities, as fully essentially moving the as

ultimately, there a And have took that last it continue we opportunity asset on things had. to to we in and we're like cash do So opportunity believe we we do year's in pay very nice that that. for the to able fully

So eyes implementing. will and out, been that our our we we're processes actively keeping continue we've

keep our running we're anything to came we it, I stronger. add to continues before situation just financial So would but be that course even that say the same were into we that? going to to running Bryan,

Bryan Baldasare

think there's Jack. don't I anything can to that, I add

Operator

And question the will of next H.C. our line Chen from Wainwright. come Yi with

Yi Chen

So COVID-XX immunological products. first fiscal drop remainder molecular of the XXXX? from think I the Do second quarter bigger noticed have trend compared fiscal continue to will the you quarter products COVID-XX to that a to that

John Kenny

little some -- that, antibody were we different were there QX, QX. as So and some occurred antigen the you're happened on ordering overall QX and was so a going an things purchases we we immuno to we there in QX. that in still and and QX that strong. patterns bit things lighter side And like that say would was on strengthening go anticipate side, the in would see a improvement QX although forward

it more we're QX was, little that QX So a being at contributor looking frankly, of quite bit from Bryan? and in standpoint. a percentage than a

Bryan Baldasare

outside well as United some we're add still hotspots COVID. States around there seeing molecular other world is for reagents I that the that The our interest the are thing here in that would

So see that geographies and ebbs you year. flows half back the selling for based the of into on some may the we're

Yi Chen

Got it.

especially could the compared test XXXX think and wider rapid testing? row have do get seems XXXX antigen bigger towards the COVID-XX a as potentially of into you end that to So PCR forward, going distribution, point-of-care

John Kenny

We of the you forward we've go will into more a to see as antigen-based bit, testing people using and see a that's ramping, -- we number We will, molecular go something of little do antigen it you'll will good the bit start got large the think probably that that level that we XXXX. molecular test, ramping. bigger but But a base, if get do don't you'll kind the because out we than think balanced. believe a little

maybe X/X two side kind closer little molecular, So increase I it where of is X/X bit to right on molecular We some that balance immuno. more forward. see the of between gap. closes on will it now, as move those strong is being a an still we the the that of would go but see that immuno and you'll say

Yi Chen

it. it. like market, Got Got Revogene to offices? testing product, when more do the -- or COVID-XX the with And utilization Smaller it see you it point-of-care get in in the setting to hospital reaches the more setting respect eventually

John Kenny

point the help significant do in us COVID think Bryan have settings. be the both into has in a point We season. going as than you in the for that. fiscal the We a to do expand next in an and the marketplace us, this I have counting is flu position believe would that do from still I we not will it mentioned, year, care, for important anything as applications assay physician stronger COVID say probably go to hospital pretty care. of know we're on of we in it's because but we testing important this the do remainder of

FDA an was right and work we to secure so us, sure to the it product, for work EUA with have And the try making really approval.

season. So towards. for really flu we're And that's we're prepared working what next

see higher installed us in I have of think marketplace, things seen hospital side base but our in interest as well. is we you'll the point-of-care -- the

Operator

line come with the from Stephen will of question next Sandler. Mah Piper Our

Poon Mah

follow-up one question So guide. Life Science on the

Life more of guide push testing. EUAs testing more possibly towards antigen number lot return potential Given seems return testing got using the a be Science funding there from towards school and to government. to for office to point-of-care antigen to there we testing, any your Is like the shift serial test as manufacturers upside and testing, a

on maybe thoughts that? your Just get

John Kenny

would holding we we to confident lifestyle, reason will, So more we're a say our in guide, is companies the we able are our do do if very would guidance different return upon testing that that be be that to of say I why upside our guidance. dependent being number holding in -- normal you would a part of see that I reason the of part if through people they are I handicap. from working if their that products, There that process. number trying to little able And those, not wouldn't are there's an way EUA something a secure were say number a success -- personally our would a And approval. that's upside, work to to EUA that want of but of that, early then on towards bit to Stephen. using lead

Poon Mah

Okay. diagnostics moving Yes. understandable. then possibility EUA looks like to XXXX? would baked question. It in going early to it No, that's conservatism where the impact and for fair A similar get guide. enough there And in Is maybe to June. Is there Revogene over a it any to you're submit there?

John Kenny

by to end exactly That is for what the intention -- is doing. June, the we're resubmit of We sure.

edits. number significant felt as probably Certainly, more will it that from for at anything We to reasonable optimistic we the that We're a this have make and not market, bring them, could and a FDA lead we in cautiously some to should how upside. approval, they point, we get prudent in forward. get did idea we'll being good us quick no will that we We asked our that. was plan time that that worked respond, go to to But frame. look not with include we that

Poon Mah

of formal that? as did to there do the plans ahead Got doing before. EUA the And Okay. and you instruments it. then any preorders of Is shipments on

Bryan Baldasare

not we of the that released in at could we our things one this I the would with our point, upon think notification of was not let correspondence they So us the FDA, and ship pressed SARS-CoV-X resubmission. test that

as I of half a the you I upon of changed a a being us has do the now bit little rule to where first that. will, we to to that environment a on guess, opposed can't as different, notification year the resubmit, it's ship able little guess, So for compared if bit,

to So can shipping we're going before related. clearance anything wait for start COVID to we have

John Kenny

I that customers out that thing is the are would there. other there to that some say Stephen, are Yes. that

customers our were group B, of Revogene, of about we first unless One it talking was Group them with talk A, we and all, other to were core we when strategies do COVID, about the we tests. wouldn't diff, C. to going

we it's for -- value in so well customer part come other that is been the out tests. have of didn't reason even those worked that us, though And COVID saw

to subset COVID And were a bit anxious There say play to the some of a pattern of would customers that see take how viewing of be next they I it for are in still conservative those and that stuff. EUA so probably that's to holding able systems at going they're that for are kind why are wanting we little a see time. to But goes. an until way we're At really people the that that that that's this step. least

Poon Mah

Yes.

year's I sense. was makes That diagnostics. know Okay. on flu And season then my again, nonexistent. question, last this

flu what know a I guide, coming year's on part thoughts of small the next your any in are diagnostics season? season flu up On year's on thoughts it's but next December? the XXXX,

John Kenny

numbers the the COVID. decrease was Group really, amount related A That flu depressed. strep have respiratory was in and next is, incredibly low other some was gone hasn't hasn't Stephen, year the we biggest, There I the flu look biggest gone Flu group outside the to of season A really were like. products Because news everything nothing was Well, away. of will horrendous. good don't testing what of but strep our and away. know upside.

will continue we go if And we going year do this type is next don't better And of it would normal. anticipate certainly, be that forward. be to will testing know anticipate we that year. so than as We just

before, But we that to the light. view think of very, the seen, cautious have but that. that taking we a were remains be baseline numbers I because that get will we're very very beyond I we're confident so baseline as said that

be remains it to seen. So

Operator

questions. And at see this no time, further I

will comments. the turn to for closing call So Jack Kenny I over

John Kenny

you, Thank Holly.

weeks. First And up have of for look of forward conferences as joining again, the one progress all, much at and a some to, to August, look of that in stronger conclusion We sharing thank of thank speaking after very we we certainly hope to continue Meridian. day, you coming coming forward in QX quarter. for to the hopefully, you all great you we the us the you our build you have make a again with And today. I joining.

Operator

like participating Once in Quarter you today's Conference Second thank Meridian Earnings XXXX Call. again, to Bioscience for we'd Fiscal

You may now disconnect.

Charles Wood	VP, Corporate Strategy, Business Development & IR
John Kenny	President, CEO & Director
Bryan Baldasare	EVP, CAO, CFO & Secretary
Andrew Brackmann	William Blair & Company
Yi Chen	H.C. Wainwright & Co.
Poon Mah	Piper Sandler & Co.

Meridian Bioscience (VIVO) 7 May 212021 Q2 Earnings call transcript