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 | ||
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
Emerging growth company |
Class |
Outstanding July 31, 2022 | |
Common Stock, no par value |
Page(s) |
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PART I. |
||||||
Item 1. |
Financial Statements (Unaudited) | |||||
1 | ||||||
2 | ||||||
3 | ||||||
4-5 |
||||||
6 | ||||||
7-18 |
||||||
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 19-28 |
||||
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk | 28 | ||||
Item 4. |
Controls and Procedures | 28 | ||||
PART II. |
||||||
Item 1. |
Legal Proceedings | 29 | ||||
Item 1A. |
Risk Factors | 29 | ||||
Item 6. |
Exhibits | 30 | ||||
31 |
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
NET REVENUES |
$ | |
$ | |
$ | |
$ | |
||||||||
COST OF SALES |
||||||||||||||||
GROSS PROFIT |
||||||||||||||||
OPERATING EXPENSES |
||||||||||||||||
Research and development |
||||||||||||||||
Selling and marketing |
||||||||||||||||
General and administrative |
||||||||||||||||
Acquisition and transaction related costs |
||||||||||||||||
Litigation and select legal costs |
||||||||||||||||
Change in fair value of acquisition consideration |
( |
) | ( |
) | ||||||||||||
Total operating expenses |
||||||||||||||||
OPERATING INCOME (LOSS) |
( |
) | ||||||||||||||
OTHER INCOME (EXPENSE) |
||||||||||||||||
Interest income |
||||||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
RADx grant income |
||||||||||||||||
Other, net |
( |
) | ||||||||||||||
Total other income (expense), net |
( |
) | ( |
) | ( |
) | ||||||||||
EARNINGS (LOSS) BEFORE INCOME TAXES |
( |
) | ||||||||||||||
INCOME TAX PROVISION |
||||||||||||||||
NET EARNINGS (LOSS) |
$ | ( |
) | $ | |
$ | $ | |||||||||
BASIC EARNINGS (LOSS) PER COMMON SHARE |
$ | ( |
) | $ | $ | $ | ||||||||||
DILUTED EARNINGS (LOSS) PER COMMON SHARE |
$ | ( |
) | $ | $ | $ | ||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC |
||||||||||||||||
EFFECT OF DILUTIVE STOCK OPTIONS AND RESTRICTED SHARE UNITS |
||||||||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED |
||||||||||||||||
ANTI-DILUTIVE SECURITIES: |
||||||||||||||||
Common share options and restricted share units |
||||||||||||||||
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
NET EARNINGS (LOSS) |
$ | ( |
) | $ | |
$ | |
$ | |
|||||||
Other comprehensive income (loss): |
||||||||||||||||
Foreign currency translation adjustment |
( |
) | ( |
) | ||||||||||||
Reclassification of realized gain on cash flow hedge |
( |
) | ||||||||||||||
Unrealized gain on cash flow hedge |
||||||||||||||||
Reclassification of amortization of gain on cash flow hedge |
( |
) | ||||||||||||||
Income taxes related to items of other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other comprehensive income (loss), net of tax |
( |
) | ( |
) | ||||||||||||
COMPREHENSIVE INCOME (LOSS) |
$ | ( |
) | $ | |
$ | |
$ | |
|||||||
Nine Months Ended June 30, |
||||||||
2022 |
2021 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net earnings |
$ | |
$ | |
||||
Non-cash items included in net earnings: |
||||||||
Depreciation of property, plant and equipment |
||||||||
Amortization of intangible assets |
||||||||
Stock-based compensation |
||||||||
Deferred income taxes |
( |
) | ||||||
Estimated litigation costs |
||||||||
Change in fair value of acquisition consideration |
( |
) | ||||||
Change in the following: |
||||||||
Accounts receivable |
( |
) | ||||||
Inventories |
( |
) | ||||||
Prepaid expenses and other current assets |
( |
) | ( |
) | ||||
Accounts payable and accrued expenses |
( |
) | ||||||
Income taxes payable |
( |
) | ( |
) | ||||
Other, net |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash provided by operating activities |
||||||||
|
|
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Purchase of property, plant and equipment |
( |
) | ( |
) | ||||
Acquisition, net of cash acquired and holdback |
( |
) | ||||||
Payment of acquisition consideration holdback |
( |
) | ||||||
|
|
|
|
|||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Payment on revolving credit facility |
( |
) | ( |
) | ||||
Payment of deferred financing costs |
( |
) | ||||||
Proceeds from exercise of stock options |
||||||||
Employee taxes paid upon stock option exercises and net share settlement of restricted share units |
( |
) | ||||||
|
|
|
|
|||||
Net cash used in financing activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
( |
) | ||||||
|
|
|
|
|||||
Net Increase in Cash and Cash Equivalents |
||||||||
Cash and Cash Equivalents at Beginning of Period |
||||||||
|
|
|
|
|||||
Cash and Cash Equivalents at End of Period |
$ | |
$ | |
||||
|
|
|
|
June 30, 2022 (Unaudited) |
September 30, 2021 |
|||||||
CURRENT ASSETS |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable, less allowances of $ |
||||||||
Inventories, net |
||||||||
Prepaid expenses and other current assets |
||||||||
Total current assets |
||||||||
PROPERTY, PLANT AND EQUIPMENT, at Cost |
||||||||
Land |
||||||||
Buildings and improvements |
||||||||
Machinery, equipment and furniture |
||||||||
Construction in progress |
||||||||
Subtotal |
||||||||
Less: accumulated depreciation and amortization |
||||||||
Property, plant and equipment, net |
||||||||
OTHER ASSETS |
||||||||
Goodwill |
||||||||
Other intangible assets, net |
||||||||
Right-of-use |
||||||||
Deferred income taxes |
||||||||
Other assets |
||||||||
Total other assets |
||||||||
TOTAL ASSETS |
$ | |
$ | |
||||
June 30, 2022 (Unaudited) |
September 30, 2021 |
|||||||
CURRENT LIABILITIES |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued employee compensation costs |
||||||||
Accrued product recall costs |
||||||||
Accrued estimated litigation cost s |
||||||||
Current operating lease obligations |
||||||||
Current government grant obligations |
||||||||
Other accrued expenses |
||||||||
Income taxes payable |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
|
|
|
|
|||||
NON-CURRENT LIABILITIES |
||||||||
Post-employment benefits |
||||||||
Long-term operating lease obligations |
||||||||
Long-term debt |
||||||||
Government grant obligations |
||||||||
Long-term income taxes payable |
||||||||
Deferred income taxes |
||||||||
Other non-current liabilities |
||||||||
|
|
|
|
|||||
Total non-current liabilities |
||||||||
|
|
|
|
|||||
COMMITMENTS AND CONTINGENCIES |
||||||||
SHAREHOLDERS’ EQUITY |
||||||||
Preferred stock, |
||||||||
Common shares, |
||||||||
Additional paid-in capital |
||||||||
Treasury stock, at cost; |
( |
) | ||||||
Retained earnings |
||||||||
Accumulated other comprehensive income (loss) |
( |
) | ||||||
|
|
|
|
|||||
Total shareholders’ equity |
||||||||
|
|
|
|
|||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ | |
$ | |
||||
|
|
|
|
Common Shares |
Additional Paid-In Capital |
Treasury Stock |
Retained Earnings |
Accumulated Other Comp. Income (Loss) |
Total Shareholders’ Equity |
|||||||||||||||||||||||
Sh. |
Amt. |
|||||||||||||||||||||||||||
THREE MONTHS ENDED JUNE 30, 2022 |
||||||||||||||||||||||||||||
Balance at March 31, 2022 |
$ | |
( |
) | $ | ( |
) | $ | |
$ | ( |
) | $ | |
||||||||||||||
Conversion of restricted share units and exercise of stock options |
— | — | ||||||||||||||||||||||||||
Stock compensation expense |
— | — | — | — | — | |||||||||||||||||||||||
Net loss |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||
Foreign currency translation adjustment |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Hedging activity, net of tax |
— | — | — | — | — | |||||||||||||||||||||||
Balance at June 30, 2022 |
$ | |
( |
) | $ | ( |
) | $ | |
$ | ( |
) | $ | |
||||||||||||||
THREE MONTHS ENDED JUNE 30, 2021 |
||||||||||||||||||||||||||||
Balance at March 31, 2021 |
$ | |
$ | $ | |
$ | $ | |
||||||||||||||||||||
Conversion of restricted share units and exercise of stock options |
— | — | — | — | ||||||||||||||||||||||||
Stock compensation expense |
— | — | — | — | — | |||||||||||||||||||||||
Net earnings |
— | — | — | — | — | |||||||||||||||||||||||
Foreign currency translation adjustment |
— | — | — | — | — | |||||||||||||||||||||||
Hedging activity, net of tax |
— | — | — | — | — | |||||||||||||||||||||||
Balance at June 30, 2021 |
$ | |
$ | $ | |
$ | $ | |
||||||||||||||||||||
Common Shares Issued |
Additional Paid-In Capital |
Treasury Stock |
Retained Earnings |
Accumulated Other Comp. Income (Loss) |
Total Shareholders’ Equity |
|||||||||||||||||||||||
Sh. |
Amt. |
|||||||||||||||||||||||||||
NINE MONTHS ENDED JUNE 30, 2022 |
||||||||||||||||||||||||||||
Balance at September 30, 2021 |
$ | |
$ | $ | |
$ | $ | |
||||||||||||||||||||
Conversion of restricted share units and exercise of stock options |
( |
) | ( |
) | ||||||||||||||||||||||||
Stock compensation expense |
— | — | — | — | — | |||||||||||||||||||||||
Net earnings |
— | — | — | — | — | |||||||||||||||||||||||
Foreign currency translation adjustment |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Hedging activity, net of tax |
— | — | — | — | — | |||||||||||||||||||||||
Balance at June 30, 2022 |
$ | |
( |
) | $ | ( |
) | $ | |
$ | ( |
) | $ | |
||||||||||||||
NINE MONTHS ENDED JUNE 30, 2021 |
||||||||||||||||||||||||||||
Balance at September 30, 2020 |
$ | |
$ | $ | |
$ | ( |
) | $ | |
||||||||||||||||||
Conversion of restricted share units and exercise of stock options |
— | — | — | — | ||||||||||||||||||||||||
Stock compensation expense |
— | — | — | — | — | |||||||||||||||||||||||
Net earnings |
— | — | — | — | — | |||||||||||||||||||||||
Foreign currency translation adjustment |
— | — | — | — | — | |||||||||||||||||||||||
Hedging activity, net of tax |
— | — | — | — | — | |||||||||||||||||||||||
Balance at June 30, 2021 |
$ | |
$ | $ | |
$ | |
$ | |
|||||||||||||||||||
1. |
Nature of Business |
2. |
Basis of Presentation |
3. |
Significant Accounting Policies |
(a) |
Recent Accounting Pronouncements – |
(b) |
Reclassifications – |
4. |
Revenue Recognition |
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||||||||||||||||
2022 |
2021 |
Inc (Dec) |
2022 |
2021 |
Inc (Dec) |
|||||||||||||||||||
Diagnostics- |
||||||||||||||||||||||||
Americas |
$ | $ | % | $ | $ | % | ||||||||||||||||||
EMEA |
( |
)% | ( |
)% | ||||||||||||||||||||
ROW |
% | ( |
)% | |||||||||||||||||||||
Total Diagnostics |
% | % | ||||||||||||||||||||||
Life Science- |
||||||||||||||||||||||||
Americas |
( |
)% | ( |
)% | ||||||||||||||||||||
EMEA |
( |
)% | % | |||||||||||||||||||||
ROW |
% | % | ||||||||||||||||||||||
Total Life Science |
( |
)% | % | |||||||||||||||||||||
Consolidated |
$ | $ | % | $ | $ | % | ||||||||||||||||||
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||||||||||||||||
2022 |
2021 |
Inc (Dec) |
2022 |
2021 |
Inc (Dec) |
|||||||||||||||||||
Diagnostics- |
||||||||||||||||||||||||
Molecular assays |
$ | $ | % | $ | $ | % | ||||||||||||||||||
Non-molecular assays |
% | % | ||||||||||||||||||||||
Total Diagnostics |
% | % | ||||||||||||||||||||||
Life Science- |
||||||||||||||||||||||||
Molecular reagents |
( |
)% | ( |
)% | ||||||||||||||||||||
Immunological reagents |
% | % | ||||||||||||||||||||||
Total Life Science |
( |
)% | % | |||||||||||||||||||||
Consolidated |
$ | $ | % | $ | $ | % | ||||||||||||||||||
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||||||||||||||||
2022 |
2021 |
Inc (Dec) |
2022 |
2021 |
Inc (Dec) |
|||||||||||||||||||
Diagnostics- |
||||||||||||||||||||||||
Gastrointestinal assays |
$ | $ | % | $ | $ | % | ||||||||||||||||||
Respiratory illness assays |
% | % | ||||||||||||||||||||||
Blood chemistry assays |
% | ( |
)% | |||||||||||||||||||||
Other |
% | % | ||||||||||||||||||||||
Total Diagnostics |
$ | % | $ | % | ||||||||||||||||||||
5. |
Fair Value Measurements |
6. |
Business Combinations |
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Net revenues |
$ | $ | $ | $ | ||||||||||||
Net earnings (loss) |
( |
) |
7. |
Lead Testing Matters |
8. |
Cash and Cash Equivalents |
June 30, 2022 |
September 30, 2021 |
|||||||
Institutional money market funds |
$ | $ | ||||||
Cash on hand, unrestricted |
||||||||
Total |
$ | $ | ||||||
9. |
Inventories, Net |
June 30, 2022 |
September 30, 2021 |
|||||||
Raw materials |
$ | $ | ||||||
Work-in-process |
||||||||
Finished goods - instruments |
||||||||
Finished goods - kits and reagents |
||||||||
Total |
$ | $ | ||||||
10. |
Goodwill and Other Intangible Assets, Net |
June 30, 2022 |
September 30, 2021 |
|||||||||||||||
Gross Carrying Value |
Accumulated Amortization |
Gross Carrying Value |
Accumulated Amortization |
|||||||||||||
Manufacturing technologies, core products and cell lines |
$ | $ | $ | $ | ||||||||||||
Trade names, licenses and patents |
||||||||||||||||
Customer lists, customer relationships and supply agreements |
||||||||||||||||
Non-compete agreements |
||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
11. |
Leasing Arrangements |
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Lease costs within cost of sales |
$ | $ | $ | $ | ||||||||||||
Lease costs within operating expenses |
||||||||||||||||
Right-of-use |
June 30, 2022 |
September 30, 2021 |
|||||||
Weighted average remaining lease term |
||||||||
Average discount rate |
% | % |
2022 (represents remainder of fiscal year) |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
Total lease payments |
||||
Less amount of lease payments representing interest |
( |
) | ||
Total present value of lease payments |
$ | |||
Nine Months Ended June 30, |
2022 |
2021 |
||||||
Cash paid for amounts included in the measurement of lease liabilities: |
||||||||
Operating cash flows from operating leases |
$ | $ | ||||||
12. |
Bank Credit Arrangements |
13. |
Contingent Obligations and Non-Current Liabilities |
June 30, 2022 |
September 30, 2021 |
|||||||
Current liabilities |
$ | $ | ||||||
Non-current liabilities |
$ | $ |
14. |
National Institutes of Health Contracts |
15. |
Reportable Segment and Major Customers Information |
Diagnostics |
Life Science |
Corporate (1) |
Eliminations (2) |
Total |
||||||||||||||||
Three Months Ended June 30, 2022 |
||||||||||||||||||||
Net revenues - |
||||||||||||||||||||
Third-party |
$ | $ | $ | — | $ | — | $ | |||||||||||||
Inter-segment |
— | ( |
) | — | ||||||||||||||||
Operating income (loss) |
( |
) | ( |
) | ||||||||||||||||
Goodwill (June 30, 2022) |
— | — | ||||||||||||||||||
Other intangible assets, net (June 30, 2022) |
— | — | ||||||||||||||||||
Total assets (June 30, 2022) |
— | ( |
) | |||||||||||||||||
Three Months Ended June 30, 2021 |
||||||||||||||||||||
Net revenues - |
||||||||||||||||||||
Third-party |
$ | $ | $ | — | $ | — | $ | |||||||||||||
Inter-segment |
— | ( |
) | — | ||||||||||||||||
Operating income (loss) |
( |
) | ||||||||||||||||||
Goodwill (September 30, 2021) |
— | — | ||||||||||||||||||
Other intangible assets, net (September 30, 2021) |
— | — | ||||||||||||||||||
Total assets (September 30, 2021) |
— | ( |
) | |||||||||||||||||
Nine Months Ended June 30, 2022 |
||||||||||||||||||||
Net revenues - |
||||||||||||||||||||
Third-party |
$ | $ | $ | — | $ | — | $ | |||||||||||||
Inter-segment |
— | ( |
) | — | ||||||||||||||||
Operating income (loss) |
( |
) | ||||||||||||||||||
Nine Months Ended June 30, 2021 |
||||||||||||||||||||
Net revenues - |
||||||||||||||||||||
Third-party |
$ | $ | $ | — | $ | — | $ | |||||||||||||
Inter-segment |
— | ( |
) | — | ||||||||||||||||
Operating income (loss) |
( |
) | ||||||||||||||||||
(1) |
Includes litigation and select legal costs, and acquisition and transaction related costs of $ |
(2) |
Eliminations consist of inter-segment transactions. |
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Operating income: |
||||||||||||||||
Diagnostics segment |
$ | $ | $ | $ | ||||||||||||
Life Science segment |
||||||||||||||||
Eliminations |
||||||||||||||||
Total segment operating income |
||||||||||||||||
Corporate operating expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Interest income |
||||||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
RADx initiative grant income |
||||||||||||||||
Other, net |
( |
) | ||||||||||||||
Consolidated earnings (loss) before income taxe s |
$ | ( |
) | $ | $ | $ | ||||||||||
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Diagnostics |
||||||||||||||||
Customer A |
% | % | % | % | ||||||||||||
Customer B |
% | % | % | % | ||||||||||||
Customer C |
% | % | % | % | ||||||||||||
Life Science |
||||||||||||||||
Customer D |
% | % | % | % | ||||||||||||
Customer E |
% | % | % | % | ||||||||||||
Customer F |
% | % | % | % |
16. |
Income Taxes |
17. |
Subsequent Event |
- | By Reportable Segment & Geographic Region |
- | By Product Platform/Type |
• | Volume growth in the gastrointestinal and non-molecular products benefitting from sales of the BreathTek product, acquired on July 31, 2021 (approximately $5,500 and $16,600 of net revenues from BreathTek in the third quarter and first nine months of fiscal 2022, respectively); |
• | Volume growth in sales of respiratory illness products, comprised of tests for Group A Strep, Mycoplasma pneumonia, Influenza, Pertussis and SARS-CoV-2, year-to-date |
• | Fluctuations in the volumes of sales of blood chemistry products, reflecting the ongoing LeadCare product recall, which commenced in May 2021, and the resumption of product shipments in February 2022 ($2,177 increase in quarterly net revenues compared to the third quarter of fiscal 2021, and a $3,244 decrease in fiscal year-to-date |
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||||||||||||||||
2022 |
2021 |
Change |
2022 |
2021 |
Change |
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Gross profit |
$ | 36,728 | $ | 37,111 | (1 | )% | $ | 154,364 | $ | 156,431 | (1 | )% | ||||||||||||
Gross profit margin |
54 | % | 58 | % | -4 points | 58 | % | 65 | % | -7 points |
Three Months Ended June 30, |
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Research & Development |
Selling & Marketing |
General & Administrative |
Other |
Total Operating Expenses |
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Fiscal 2021: |
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Diagnostics |
$ | 5,463 | $ | 4,966 | $ | 5,933 | $ | (3,263 | ) | $ | 13,099 | |||||||||
Life Science |
620 | 1,243 | 3,315 | — | 5,178 | |||||||||||||||
Corporate |
— | — | 2,716 | 438 | 3,154 | |||||||||||||||
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Total Expenses (2021 Quarter) |
$ | 6,083 | $ | 6,209 | $ | 11,964 | $ | (2,825 | ) | $ | 21,431 | |||||||||
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Fiscal 2022: |
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Diagnostics |
$ | 5,228 | $ | 6,353 | $ | 7,130 | $ | — | $ | 18,711 | ||||||||||
Life Science |
815 | 1,825 | 2,935 | 39 | 5,614 | |||||||||||||||
Corporate |
— | — | 3,084 | 16,000 | 19,084 | |||||||||||||||
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Total Expenses (2022 Quarter) |
$ | 6,043 | $ | 8,178 | $ | 13,149 | $ | 16,039 | $ | 43,409 | ||||||||||
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Nine Months Ended June 30, |
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Research & Development |
Selling & Marketing |
General & Administrative |
Other |
Total Operating Expenses |
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Fiscal 2021: |
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Diagnostics |
$ | 16,011 | $ | 15,914 | $ | 17,790 | $ | (5,205 | ) | $ | 44,510 | |||||||||
Life Science |
1,788 | 3,856 | 9,978 | — | 15,622 | |||||||||||||||
Corporate |
— | — | 9,059 | 2,695 | 11,754 | |||||||||||||||
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Total Expenses (2021 Year-to-Date) |
$ | 17,799 | $ | 19,770 | $ | 36,827 | $ | (2,510 | ) | $ | 71,886 | |||||||||
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Fiscal 2022: |
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Diagnostics |
$ | 15,856 | $ | 18,040 | $ | 21,750 | $ | — | $ | 55,646 | ||||||||||
Life Science |
2,072 | 5,393 | 11,996 | 107 | 19,568 | |||||||||||||||
Corporate |
— | — | 12,618 | 16,789 | 29,407 | |||||||||||||||
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Total Expenses (2022 Year-to-Date) |
$ | 17,928 | $ | 23,433 | $ | 46,364 | $ | 16,896 | $ | 104,621 | ||||||||||
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• | Increased Selling & Marketing costs in both the Diagnostics and Life Science segments, primarily reflecting the effects of filling certain open positions and the easing of certain travel and meeting restrictions imposed during the prior year in connection with the COVID-19 pandemic; |
• | Increased General & Administrative costs, primarily reflecting the combined effects of: (i) increased purchase accounting amortization expense; (ii) additional investment in incentive compensation tied to the Company’s financial performance; (iii) the timing of certain outside services costs; and (iv) increased commercial insurance costs for Directors & Officers and Property & Casualty coverages; |
• | A $3,563 and $5,505 year-over-year increase in net expense within our Diagnostics segment resulting from adjustments to the fair value of acquisition consideration in the third quarter and first nine months of fiscal 2021, respectively; |
• | An $11,374 and $9,906 year-over-year increase in litigation and select legal costs in the third quarter and first nine months of fiscal 2022, respectively, reflected within Corporate and primarily related to the previously discussed LeadCare legal matter (see “Lead Testing Matters” above); and |
• | A $3,927 and $3,995 year-over-year increase in acquisition and transaction related costs in the third quarter and first nine months of fiscal 2022, respectively, primarily within Corporate and related to the previously discussed pending acquisition (see “ Agreement and Plan of Merger” |
• | the amount of the cash to be paid under the Merger agreement is fixed and will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, financial condition or results of operations or in the event of any change in the market price of, analyst estimates of, or projections relating to, our common stock; |
• | legal or regulatory proceedings, including regulatory approvals from governmental entities (including any conditions, limitations or restrictions placed on these approvals) and the risk that one or more governmental entities may delay or deny approval, or other matters that affect the timing or ability to complete the transaction as contemplated; |
• | the possibility of disruption to our business, including increased costs and diversion of management time and resources; |
• | difficulties maintaining business and operational relationships, including relationships with clients, vendors, suppliers, distributors, resellers and other business partners; |
• | the inability to attract and retain key personnel pending consummation of the proposed Merger; |
• | potential stockholder litigation relating to the Merger could prevent or delay the Merger or otherwise negatively impact our business and operations; |
• | the inability to pursue alternative business opportunities or make changes to our business pending the completion of the proposed Merger; |
• | the requirement to pay a termination fee of $45,960 if we terminate the Merger Agreement under specified circumstances; |
• | developments beyond our control including, but not limited to, changes in domestic or global economic conditions that may affect the timing or success of the proposed Merger; and |
• | the risk that if the proposed Merger is not completed, the market price of our common stock could decline, investor confidence could decline, stockholder litigation could be brought against us, relationships with clients, suppliers and other business partners may be adversely impacted, we may be unable to retain key personnel, and profitability may be adversely impacted due to costs incurred in connection with the proposed Merger. |
101.CAL | Inline XBRL Instance Extension Calculation Linkbase | |
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 contained in Exhibit 101) |
* | Certain exhibits and schedules have been omitted, and the Registrant hereby agrees to furnish a copy of any omitted exhibits or schedules upon request. |
MERIDIAN BIOSCIENCE, INC. | ||||||
Date: August 5, 2022 |
By: | /s/ Andrew S. Kitzmiller | ||||
Andrew S. Kitzmiller | ||||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||||||
Date: August 5, 2022 |
By: | /s/ Julie Smith | ||||
Julie Smith | ||||||
Senior Vice President and Controller (Principal Accounting Officer) |