NEW YORK – Meridian Bioscience reported on Friday morning a 25 percent year-over-year decline in its fiscal third quarter revenues, one year after recording record highs in Q3 2020.
The Cincinnati-based life science and diagnostics firm recorded total revenues of $63.5 million compared to $84.8 million a year ago, missing analysts' average estimate of $77.2 million. The revenues were in line with Meridian's preliminary results released in July.
In a statement, Meridian said it believes "a meaningful year-over-year comparison is challenging to understand, since the third quarter of fiscal 2020 was the peak quarter of the COVID-19 pandemic for that fiscal year." Total revenues for Q3 2021 were up 31 percent compared to Q3 2019.
On a conference call to discuss the firm's financial results, Meridian CFO Bryan Baldasare said that overall revenues were split fairly evenly between the life science and diagnostic segments, a contrast from last year when life science revenues made up nearly 75 percent of total revenues.
Its life science revenues for the quarter were down 49 percent at $32.3 million compared to $63.2 million a year ago, due to a reduction in demand for reagents for COVID-19 testing. The firm saw $14.5 in net revenues from COVID-19-related products, approximately $12.5 million from molecular products and $2.0 million from immunological products.
Within the segment, Meridian Bioscience's fiscal Q3 molecular reagent product revenues declined 47 percent year over year to $20.4 million from $38.8 million, while immunological reagent revenues also fell, down 51 percent year over year to $11.9 million from $24.4 million. The company said it had a back order of approximately $1.0 million related to core immunoassay blocking-reagent products.
Meridian CEO Jack Kenny said on the call that the life science segment looked very different coming out of the pandemic and that he had high confidence it's becoming a $100 million per year business. Even as COVID-19 testing has waned, Kenny said there will still be some level of COVID-19 testing next year, adding to future life science segment revenues.
He added that because COVID-19 testing is surging more as a result of the Delta variant, Meridian is anticipating a stronger fiscal fourth quarter than its third quarter, but is not planning on a huge COVID-19 impact. He also said the company is prepared to scale up production if there is significant demand.
As a result of the demand for products related to COVID-19 testing, Kenny said the firm has "built a lot of loyalty" with key customers who are now using the firm's products in non-COVID-19 activities.
Meridian Bioscience's diagnostics revenues were up 44 percent year over year to $31.2 million from $21.6 million. The company said revenues in the segment were negatively impacted by supply chain issues and product recalls related to its LeadCare products, resulting in approximately $1.5 million in back orders at the end of the quarter.
Within diagnostics, revenues for molecular assays grew nearly 38 percent to $4.4 million from $3.2 million, while revenues from immunoassays and blood chemistry assays grew 46 percent to $26.8 million from $18.4 million.
At the end of the quarter, Meridian resubmitted its Revogene SARS-CoV-2 test for Emergency Use Authorization from the US Food and Drug Administration. It had previously withdrawn the submission in February to conduct additional studies.
Kenny said the current Revogene installed base is 343 instruments. He added that customers are waiting to place instruments until the SARS-CoV-2 test is authorized.
Kenny also said that trials for the firm's pipeline products were delayed somewhat after Meridian redirected resources to resubmitting the Revogene test and noted that those products won't be launched until the next fiscal year.
The company is also working on a respiratory panel for SARS-CoV-2 and influenza, although Kenny said it's "unlikely" the multiplex test will be ready for the upcoming flu season, partially due to difficulty getting fresh flu specimens to validate the test.
Meridian Bioscience's fiscal Q3 net earnings were $11.7 million, or $.26 per share, compared to $27.5 million, or $.64 per share a year ago. On an adjusted basis, EPS was $.22, missing the consensus analysts' expectation of $.31.
Meridian's Q3 R&D expenses were $6.1 million, down 9 percent from $6.7 million a year ago. Its SG&A spending was $18.2 million, down 3 percent from $18.7 million in Q3 2020. The company said it reduced R&D spending in the diagnostics segment.
The company finished the quarter with $70.0 million in cash and cash equivalents.
Meridian reaffirmed its previous fiscal full-year 2021 guidance, although it tightened the ranges. The firm expects consolidated revenues of $308 million to $314 million, diagnostics segment revenues of between $128 million and $130 million, and life science segment revenues of $180 million to $184 million. Adjusted net earnings per share are expected to be between $1.61 and $1.67.
In morning trading on the Nasdaq, Meridian's shares were down 4 percent at $20.43.