☒ |
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
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Title of each class
|
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Trading
Symbol(s) |
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Name of each exchange
on which registered |
Common Stock, no par value
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VIVO
|
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NASDAQ Global Select Market
|
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated
filer
|
☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
Class
|
Outstanding January 31, 2021
|
|
Common Stock, no par value | 43,145,015 |
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Page(s)
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PART I.
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Item 1.
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1
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2
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3
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4-5
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6
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7-19
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Item 2.
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19-28
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Item 3.
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28
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Item 4.
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28
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PART II.
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Item 1.
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28
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Item 1A.
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28
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Item 6.
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28
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29
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Three Months Ended
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||||||||
December 31,
|
||||||||
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2020
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|
2019
|
|||||
NET REVENUES
|
$ | 92,917 | $ | 47,421 | ||||
COST OF SALES
|
31,369 | 19,770 | ||||||
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|||||
GROSS PROFIT
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61,548 | 27,651 | ||||||
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OPERATING EXPENSES
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Research and development
|
5,651 | 4,763 | ||||||
Selling and marketing
|
7,021 | 6,728 | ||||||
General and administrative
|
11,938 | 8,984 | ||||||
Change in fair value of acquisition consideration
|
1,047 | 1,187 | ||||||
Restructuring costs
|
— | 275 | ||||||
Selected legal costs
|
1,227 | 320 | ||||||
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|||||
Total operating expenses
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26,884 | 22,257 | ||||||
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OPERATING INCOME
|
34,664 | 5,394 | ||||||
OTHER INCOME (EXPENSE)
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||||||||
Interest income
|
9 | 111 | ||||||
Interest expense
|
(534 | ) | (767 | ) | ||||
RADx grant income
|
|
|
800
|
|
|
|
—
|
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Other, net
|
(691 | ) | (712 | ) | ||||
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|||||
Total other expense, net
|
(416 | ) | (1,368 | ) | ||||
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|||||
EARNINGS BEFORE INCOME TAXES
|
34,248 | 4,026 | ||||||
INCOME TAX PROVISION
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7,469 | 1,199 | ||||||
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|||||
NET EARNINGS
|
$ | 26,779 | $ | 2,827 | ||||
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|||||
BASIC EARNINGS PER COMMON SHARE
|
$ | 0.62 | $ | 0.07 | ||||
DILUTED EARNINGS PER COMMON SHARE
|
$ | 0.61 | $ | 0.07 | ||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING—BASIC
|
43,098 | 42,789 | ||||||
EFFECT OF DILUTIVE STOCK OPTIONS AND RESTRICTED SHARE UNITS
|
681
|
149
|
||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING—DILUTED
|
43,779 | 42,938 | ||||||
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ANTI-DILUTIVE SECURITIES:
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||||||||
Common share options and restricted share units
|
258 | 1,407 | ||||||
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Three Months Ended
December 31, |
||||||||
2020
|
2019
|
|||||||
NET EARNINGS
|
$ | 26,779 | $ | 2,827 | ||||
Other comprehensive income (loss):
|
||||||||
Foreign currency translation adjustment
|
3,301 | 2,768 | ||||||
Unrealized gain on cash flow hedge
|
21 | — | ||||||
Reclassification of amortization of gain on cash flow hedge
|
(77 | ) | (77 | ) | ||||
Income taxes related to items of other comprehensive income
|
14 | 19 | ||||||
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|||||
Other comprehensive income, net of tax
|
3,259 | 2,710 | ||||||
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|||||
COMPREHENSIVE INCOME
|
$ | 30,038 | $ | 5,537 | ||||
|
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|
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Three Months Ended December 31,
|
2020
|
2019
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net earnings
|
$ | 26,779 | $ | 2,827 | ||||
Non-cash
items included in net earnings:
|
||||||||
Depreciation of property, plant and equipment
|
1,508 | 1,218 | ||||||
Amortization of intangible assets
|
2,221 | 1,722 | ||||||
Stock-based compensation
|
1,241 | 788 | ||||||
Deferred income taxes
|
(852 | ) | 419 | |||||
Change in acquisition consideration
|
1,047 | 1,187 | ||||||
Change in the following:
|
||||||||
Accounts receivable
|
(1,776 | ) | 550 | |||||
Inventories
|
(5,941 | ) | (3,526 | ) | ||||
Prepaid expenses and other current assets
|
2,682 | 1,434 | ||||||
Accounts payable and accrued expenses
|
(5,826 | ) | (664 | ) | ||||
Income taxes payable
|
4,032 | (464 | ) | |||||
Other, net
|
6 | (203 | ) | |||||
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Net cash provided by operating activities
|
25,121 | 5,288 | ||||||
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CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchase of property, plant and equipment
|
(2,086 | ) | (340 | ) | ||||
Payment of acquisition consideration holdback
|
(5,000 | ) | — | |||||
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Net cash used for investing activities
|
(7,086 | ) | (340 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Payment on revolving credit facility
|
(10,000 | ) | — | |||||
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|||||
Net cash used for financing activities
|
(10,000 | ) | — | |||||
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|||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
1,644 | 1,212 | ||||||
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Net Increase in Cash and Cash Equivalents
|
9,679 | 6,160 | ||||||
Cash and Cash Equivalents at Beginning of Period
|
53,514 | 62,397 | ||||||
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Cash and Cash Equivalents at End of Period
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$ | 63,193 | $ | 68,557 | ||||
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December 31,
2020 (Unaudited) |
|
|
September 30,
2020 |
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CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 63,193 | $ | 53,514 | ||||
Accounts receivable, less allowances of $579 and $513, respectively
|
40,936 | 38,512 | ||||||
Inventories, net
|
67,243 | 61,264 | ||||||
Prepaid expenses and other current assets
|
6,244 | 8,900 | ||||||
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Total current assets
|
177,616 | 162,190 | ||||||
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PROPERTY, PLANT AND EQUIPMENT, at Cost
|
||||||||
Land
|
997 | 991 | ||||||
Buildings and improvements
|
32,320 | 32,188 | ||||||
Machinery, equipment and furniture
|
71,647 | 69,854 | ||||||
Construction in progress
|
6,118 | 1,200 | ||||||
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Subtotal
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111,082 | 104,233 | ||||||
Less: accumulated depreciation and amortization
|
75,094 | 73,113 | ||||||
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Property, plant and equipment, net
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35,988 | 31,120 | ||||||
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OTHER ASSETS
|
||||||||
Goodwill
|
114,868 | 114,186 | ||||||
Other intangible assets, net
|
80,976 | 83,197 | ||||||
Right-of-use assets, net
|
6,213 | 6,336 | ||||||
Deferred income taxes
|
7,714 | 7,647 | ||||||
Other assets
|
555 | 585 | ||||||
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|
|||||
Total other assets
|
210,326 | 211,951 | ||||||
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|||||
TOTAL ASSETS
|
$ | 423,930 | $ | 405,261 | ||||
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1.
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Nature of Business
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2.
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Basis of Presentation
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3.
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Significant Accounting Policies
|
(b)
|
Reclassifications –
|
4.
|
Revenue Recognition
|
Three Months Ended December 31,
|
||||||||||||
2020
|
2019
|
Inc (Dec)
|
||||||||||
Diagnostics-
|
||||||||||||
Americas
|
$ | 23,551 | $ | 27,735 | (15 | )% | ||||||
EMEA
|
6,020 | 6,500 | (7 | )% | ||||||||
ROW
|
750 | 556 | 35 | % | ||||||||
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Total Diagnostics
|
30,321 | 34,791 | (13 | )% | ||||||||
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|||||||
Life Science-
|
||||||||||||
Americas
|
18,755 | 4,012 | 367 | % | ||||||||
EMEA
|
32,311 | 4,960 | 551 | % | ||||||||
ROW
|
11,530 | 3,658 | 215 | % | ||||||||
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|||||||
Total Life Science
|
62,596 | 12,630 | 396 | % | ||||||||
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|||||||
Consolidated
|
$ | 92,917 | $ | 47,421 | 96 | % | ||||||
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Three Months Ended
|
||||||||||||
2020
|
2019
|
Inc
|
||||||||||
Diagnostics-
|
||||||||||||
Molecular assays
|
$ | 4,590 | $ | 6,903 | (34 |
)%
|
||||||
Non-molecular
assays
|
25,731 | 27,888 | (8 | )% | ||||||||
|
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|
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|||||||
Total Diagnostics
|
$ | 30,321 | $ | 34,791 |
|
(13 | )% | |||||
|
|
|
|
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|
|||||||
Life Science-
|
||||||||||||
Molecular reagents
|
$ | 46,029 | $ | 5,367 | 758 | % | ||||||
Immunological reagents
|
16,567 | 7,263 | 128 | % | ||||||||
|
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|||||||
Total Life Science
|
$ | 62,596 | $ | 12,630 | 396 | % | ||||||
|
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|
Three Months Ended December 31,
|
||||||||||||
2020
|
2019
|
Inc
|
||||||||||
Diagnostics-
|
||||||||||||
Gastrointestinal assays
|
$ | 15,452 | $ | 16,251 | (5 | )% | ||||||
Respiratory illness assays
|
4,806 | 7,778 | (38 | )% | ||||||||
Blood chemistry assays
|
4,394 | 4,951 | (11 | )% | ||||||||
Other
|
5,669 | 5,811 | (2 | )% | ||||||||
|
|
|
|
|
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Total Diagnostics
|
$ | 30,321 | $ | 34,791 | (13 | )% | ||||||
|
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5.
|
Fair Value Measurements
|
Fair Value Measurements Using
Inputs Considered as |
||||||||||||||||
Carrying
Value
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Interest rate swaps -
|
||||||||||||||||
As of December 31, 2020
|
$ | (693 | ) | $ | — | $ | (693 | ) | $ | — | ||||||
As of September 30, 2020
|
$ | (713 | ) | $ | — | $ | (713 | ) | $ | — | ||||||
Contingent consideration (GeneP
OC
)
|
||||||||||||||||
As of December 31, 2020
|
$ | (21,956 | ) | $ | — | $ | — | $ | (21,956 | ) | ||||||
As of September 30, 2020
|
$ | (20,909 | ) | $ | — | $ | — | $ | (20,909 | ) |
6.
|
Business Combinations
|
PRELIMINARY
|
||||||||||||
April 30,
2020
(as initially
reported) |
Measurement
Period Adjustments |
April 30,
2020
(as adjusted)
|
||||||||||
Fair value of assets acquired -
|
||||||||||||
Cash
|
$ | 5,006 | $ | — | $ | 5,006 | ||||||
Accounts receivable
|
637 | — | 637 | |||||||||
Inventories
|
4,329 | — | 4,329 | |||||||||
Other current assets
|
851 | 1,825 | 2,676 | |||||||||
Property, plant and equipment
|
544 | 39 | 583 | |||||||||
Goodwill
|
29,288 | (4,785 | ) | 24,503 | ||||||||
Other intangible assets (estimated useful life):
|
||||||||||||
Non-compete
agreement (5 years)
|
120 | (10 | ) | 110 | ||||||||
Trade name (10 years)
|
3,540 | 320 | 3,860 | |||||||||
Technology (15 years)
|
5,590 | 530 | 6,120 | |||||||||
Customer relationships (10 years)
|
19,370 | 1,270 | 20,640 | |||||||||
Right-of-use
|
1,358 | (47 | ) | 1,311 | ||||||||
Deferred tax assets, net
|
5,566 | 1,151 | 6,717 | |||||||||
|
|
|
|
|
|
|||||||
76,199 | 293 | 76,492 | ||||||||||
Fair value of liabilities assumed -
|
||||||||||||
Accounts payable and accrued expenses (including current portion of lease and government grant obligations)
|
7,757 | 251 | 8,008 | |||||||||
Long-term lease obligations
|
1,054 | 42 | 1,096 | |||||||||
Long-term government grant obligations
|
10,792 | — | 10,792 | |||||||||
Other
non-current
liabilities
|
291 | — | 291 | |||||||||
|
|
|
|
|
|
|||||||
19,894 | 293 | 20,187 | ||||||||||
|
|
|
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|
|||||||
Total consideration paid (including $8,068 to pay off long-term debt)
|
$ | 56,305 | $ | — | $ | 56,305 | ||||||
|
|
|
|
|
|
Three Months Ended December 31,
|
2020
|
2019
|
||||||
Net Revenues
|
$ | 92,917 | $ | 51,194 | ||||
Net Earnings
|
$ | 26,779 | $ | 1,182 |
Three Months Ended December 31,
|
2020
|
2019
|
||||||
Adjustments to Net Revenues
|
||||||||
Exalenz
pre-acquisition
revenues
|
$
|
—
|
|
$ | 3,773 | |||
|
|
|
|
|||||
Adjustments to Net Earnings
|
||||||||
Exalenz
pre-acquisition
net losses
|
$
|
—
|
|
$ | (752 | ) | ||
Pro forma adjustments:
|
||||||||
Remove net impact of non-continuing personnel, locations or activities
|
|
—
|
101 | |||||
Incremental depreciation and amortization
|
|
—
|
(913 | ) | ||||
Incremental interest costs, net
|
|
—
|
(391 | ) | ||||
Tax effects of pro forma adjustments and recognizing benefit on resulting Exalenz losses
|
|
—
|
310 | |||||
|
|
|
|
|||||
Total Adjustments to Net Earnings
|
$ | — | $ | (1,645 | ) | |||
|
|
|
|
7
.
|
December 31,
2020 |
September 30,
2020 |
|||||||
Institutional money market funds
|
$ | 1,017 | $ | 1,017 | ||||
Cash on hand, unrestricted
|
62,176 | 52,497 | ||||||
|
|
|
|
|||||
Total
|
$ | 63,193 | $ | 53,514 | ||||
|
|
|
|
8
.
|
Inventories
, Ne
t
|
December 31,
2020 |
September 30,
2020 |
|||||||
Raw materials
|
$ | 13,868 | $ | 11,966 | ||||
Work-in-process
|
20,874 | 19,477 | ||||||
Finished goods - instruments
|
1,532 | 1,594 | ||||||
Finished goods - kits and reagents
|
30,969 | 28,227 | ||||||
|
|
|
|
|||||
Total
|
$ | 67,243 | $ | 61,264 | ||||
|
|
|
|
9
.
|
Leasing Arrangements
|
December 31,
2020 |
||||
2021 (represents remainder of fiscal year)
|
$ | 1,590 | ||
2022
|
1,873 | |||
2023
|
1,346 | |||
2024
|
1,002 | |||
2025
|
707 | |||
Thereafter
|
292 | |||
|
|
|||
Total lease payments
|
6,810 | |||
Less amount of lease payments representing interest
|
(462 | ) | ||
|
|
|||
Total present value of lease payments
|
$ | 6,348 | ||
|
|
Three Months Ended December 31,
|
2020
|
2019
|
||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||||||
Operating cash flows from operating leases
|
$ | 494 | $ | 387 | ||||
|
|
|
|
10.
|
Goodwill and Other Intangible Assets, Net
|
December 31, 2020
|
September 30, 2020
|
|||||||||||||||
Gross
Carrying Value |
Accumulated
Amortization |
Gross
Carrying Value |
Accumulated
Amortization |
|||||||||||||
Manufacturing technologies, core products and cell lines
|
$ | 62,436 | $ | 19,791 | $ | 62,363 | $ | 18,750 | ||||||||
Trade names, licenses and patents
|
18,510 | 8,351 | 18,425 | 7,801 | ||||||||||||
Customer lists, customer relationships and supply agreements
|
45,263 | 17,186 | 45,071 | 16,210 | ||||||||||||
Government grants
|
847 | 847 | 810 | 810 | ||||||||||||
Non-compete
agreements
|
110 | 15 | 110 | 11 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 127,166 | $ | 46,190 | $ | 126,779 | $ | 43,582 | ||||||||
|
|
|
|
|
|
|
|
11
.
|
Bank Credit Arrangements
|
12.
|
Contingent Obligations and
Non-Current
Liabilities
|
13.
|
National Institutes of Health Contract
|
1
4
.
|
Reportable Segment and Major Customers Information
|
Three Months Ended December 31, 2020
|
||||||||
Segment Revenue %
|
Consolidated Revenue %
|
|||||||
Diagnostics
|
||||||||
Customer A
|
10 | % | 4 | % | ||||
Customer B
|
11 | % | 3 | % | ||||
Customer C
|
12 | % | 4 | % | ||||
|
|
|
|
|||||
33 | % | 11 | % | |||||
|
|
|
|
|||||
Life Science
|
||||||||
Customer D
|
3 | % | 2 | % | ||||
Customer E
|
5 | % | 4 | % | ||||
Customer F
|
14 | % | 9 | % | ||||
|
|
|
|
|||||
22 | % | 15 | % | |||||
|
|
|
|
Three Months Ended December 31, 2019
|
||||||||
Segment Revenue %
|
Consolidated Revenue %
|
|||||||
Diagnostics
|
||||||||
Customer A
|
15 | % | 11 | % | ||||
Customer B
|
6 | % | 4 | % | ||||
Customer C
|
12 | % | 9 | % | ||||
|
|
|
|
|||||
33 | % | 24 | % | |||||
|
|
|
|
|||||
Life Science
|
||||||||
Customer D
|
8 | % | 2 | % | ||||
Customer E
|
7 | % | 2 | % | ||||
|
|
|
|
|||||
15 | % | 4 | % | |||||
|
|
|
|
Diagnostics
|
Life Science
|
Corporate
(1)
|
Eliminations
(2)
|
Total
|
||||||||||||||||
Three Months Ended December 31, 2020
|
|
|||||||||||||||||||
Net revenues -
|
||||||||||||||||||||
Third-party
|
$ | 30,321 | $ | 62,596 | $ | — | $ | — | $ | 92,917 | ||||||||||
Inter-segment
|
69 | 18 | — | (87 | ) | — | ||||||||||||||
Operating income (loss)
|
(1,182 | ) | 39,797 | (3,963 | ) | 12 | 34,664 | |||||||||||||
Goodwill (December 31, 2020)
|
94,944 | 19,924 | — | — | 114,868 | |||||||||||||||
Other intangible assets, net (December 31, 2020)
|
80,966 | 10 | — | — | 80,976 | |||||||||||||||
Total assets (December 31, 2020)
|
308,990 | 114,946 | — | (6 | ) | 423,930 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Three Months Ended December 31, 2019
|
||||||||||||||||||||
Net revenues -
|
||||||||||||||||||||
Third-party
|
$ | 34,791 | $ | 12,630 | $ | — | $ | — | $ | 47,421 | ||||||||||
Inter-segment
|
97 | 65 | — | (162 | ) | — | ||||||||||||||
Operating income (loss)
|
5,141 | 2,328 | (2,087 | ) | 12 | 5,394 | ||||||||||||||
Goodwill (September 30, 2020)
|
94,855 | 19,331 | — | — | 114,186 | |||||||||||||||
Other intangible assets, net (September 30, 2020)
|
83,179 | 18 | — | — | 83,197 | |||||||||||||||
Total assets (September 30, 2020)
|
306,812 | 98,483 | — | (34 | ) | 405,261 |
(1)
|
Includes Selected Legal Costs of $1,227
in the three months ended December
31, 2020 and Restructuring Costs and Selected Legal Costs of $370
in the three months ended December 31, 2019.
|
(2)
|
Eliminations consist of inter-segment transactions.
|
Three Months Ended December 31,
|
2020
|
2019
|
||||||
Operating income
(loss)
:
|
|
|
|
|
|
|
|
|
Diagnostics segment
|
|
$
|
(1,182
|
)
|
|
$
|
5,141
|
|
Life Science segment
|
|
|
39,797
|
|
|
|
2,328
|
|
Eliminations
|
|
|
12
|
|
|
|
12
|
|
Total operating income
|
38,627 | 7,481 | ||||||
Corporate expenses
|
(3,963 | ) | (2,087 | ) | ||||
Interest income
|
9 | 111 | ||||||
Interest expense
|
(534 | ) | (767 | ) | ||||
RADx initiative grant income
|
|
|
800
|
|
|
|
—
|
|
Other, net
|
(691 | ) | (712 | ) | ||||
|
|
|||||||
Consolidated earnings before income taxes
|
$
|
34,248 | $ | 4,026 | ||||
|
|
1
5
.
|
Income Taxes
|
16.
|
Litigation Matters
|
17.
|
Subsequent Event
|
(i) |
significantly higher revenues in the Life Science segment, due to supplying key molecular components and antibodies to diagnostic test manufacturers for use in
COVID-19
related PCR and antibody tests (up $49,966);
|
(ii) |
higher research and development spending in the Diagnostics segment (up $895) under new product development programs;
|
(iii) |
increased cash-based incentive compensation (up $600) tied to higher revenues and profit levels;
|
(iv) |
increased intangible asset amortization, primarily resulting from purchase accounting amortization related to the acquisition of Exalenz in April 2020 (up $499);
|
(v) |
increased legal expenses related to the DOJ matter at the Billerica, Massachusetts facility (up $947) (see “Lead Testing Matters” below); and
|
(vi) |
the fiscal 2021 first quarter including $800 in grant income related to the National Institutes of Health RADx initiative (see Note 13 of the accompanying Condensed Consolidated Financial Statements).
|
- |
By Reportable Segment & Geographic Region
|
- |
By Product Platform/Type
|
Three Months Ended December 31,
|
||||||||||||
2020
|
2019
|
Change
|
||||||||||
Gross Profit
|
$ | 61,548 | $ | 27,651 | 123 | % | ||||||
Gross Profit Margin
|
66 | % | 58 | % | 8 points |
Research &
Development |
Selling &
Marketing |
General &
Administrative |
Other
|
Total Operating
Expenses |
||||||||||||||||
Fiscal 2020 First Quarter:
|
||||||||||||||||||||
Diagnostics
|
$ | 4,175 | $ | 5,396 | $ | 4,929 | $ | 1,317 | $ | 15,817 | ||||||||||
Life Science
|
588 | 1,332 | 2,338 | 95 | 4,353 | |||||||||||||||
Corporate
|
— | — | 1,717 | 370 | 2,087 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total 2020 First Quarter Expenses
|
$ | 4,763 | $ | 6,728 | $ | 8,984 | $ | 1,782 | $ | 22,257 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fiscal 2021 First Quarter:
|
||||||||||||||||||||
Diagnostics
|
$ | 5,070 | $ | 5,728 | $ | 5,748 | $ | 1,047 | $ | 17,593 | ||||||||||
Life Science
|
581 | 1,293 | 3,454 | — | 5,328 | |||||||||||||||
Corporate
|
— | — | 2,736 | 1,227 | 3,963 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total 2021 First Quarter Expenses
|
$ | 5,651 | $ | 7,021 | $ | 11,938 | $ | 2,274 | $ | 26,884 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Research &
Development |
Selling &
Marketing |
General &
Administrative |
Other
|
Total Operating
Expenses |
||||||||||||||||
2020 First Quarter Expenses
|
$ | 4,763 | $ | 6,728 | $ | 8,984 | $ | 1,782 | $ | 22,257 | ||||||||||
% of Revenues
|
10 | % | 14 | % | 19 | % | 4 | % | 47 | % | ||||||||||
Fiscal 2021 Increases (Decreases):
|
||||||||||||||||||||
Diagnostics
|
895 | 332 | 819 | (270 | ) | 1,776 | ||||||||||||||
Life Science
|
(7 | ) | (39 | ) | 1,116 | (95 | ) | 975 | ||||||||||||
Corporate
|
— | — | 1,019 | 857 | 1,876 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
2021 First Quarter Expenses
|
$ | 5,651 | $ | 7,021 | $ | 11,938 | $ | 2,274 | $ | 26,884 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
% of Revenues
|
6 | % | 8 | % | 13 | % | 2 | % | 29 | % | ||||||||||
% Increase
|
19 | % | 4 | % | 33 | % | 28 | % | 21 | % |
• |
Increased Research & Development costs, primarily reflecting the development of the molecular
SARS-CoV-2
|
• |
Increased Selling & Marketing costs, primarily reflecting increased bonus and commissions paid to sustain the Diagnostics segment sales force during the downturn caused by the
COVID-19
pandemic, partially offset by the effects of reduced travel from restrictions imposed during the pandemic and the effect such restrictions have had on general sales and marketing activities;
|
• |
Increased General & Administrative costs, primarily reflecting additional investment in incentive compensation, along with the addition of expenses related to Exalenz, including purchase accounting amortization; and
|
• |
Increased Selected Legal Costs, partially offset by a decrease in restructuring costs and a decrease in the effect of changes in the fair value of the contingent consideration obligation for the GenePOC business (reflected within “Other” in the above tables).
|
10.1*† | Chief Executive Officer Cash-Based Incentive Compensation Plan for Fiscal Year 2021 | |
10.2*† | Executive Vice President Cash-Based Incentive Compensation Plan for Fiscal Year 2021 |
* |
Certain portions of this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation
S-K.
The omitted information is not material and would likely cause competitive harm to the Registrant if publicly disclosed. The Registrant hereby agrees to furnish a copy of any omitted portion to the SEC upon request.
|
† |
Management Compensatory Agreement
|
MERIDIAN BIOSCIENCE, INC.
|
||||||
Date:
February 5, 2021
|
By: |
/s/ Bryan T. Baldasare
|
||||
Bryan T. Baldasare | ||||||
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
Exhibit 10.1
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
CHIEF EXECUTIVE OFFICER
LEVEL 9
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
CHIEF EXECUTIVE OFFICER
LEVEL 9
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS
EXHIBIT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE
COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***]
I. |
PURPOSE |
The purpose of this cash-based incentive compensation plan (the Plan) is to define a mechanism for stimulating and rewarding the achievement of business goals by eligible employees, as proposed by the Compensation Committee of the Board of Directors of the Company (the Board) and agreed by the Board.
II. |
SCOPE |
This Plan is for the Chief Executive Officer of Meridian Bioscience, Inc. and its subsidiaries (the Company).
III. |
ELIGIBILITY REQUIREMENTS |
Eligibility for participation in this Plan is limited to an elected officer of the Company in the chief executive officer position as determined in the sole discretion of the Compensation Committee of the Board (the Executive or Participant).
1. |
An Executive hired after October 1, 2020 are eligible for a pro-rated bonus based on the number of days employed during the fiscal year. Employees hired after July 1, 2021 will not be eligible for Bonus until Fiscal Year 2022. |
2. |
An Executive who terminates after September 30, 2021 but prior to the date the bonus is paid are eligible for his or her bonus, including any business accelerators noted in Section IV below, except in the case where the Executive is terminated for Cause as defined in the Meridian Bioscience, Inc. 2021 Stock Incentive Plan. |
3. |
The Executives base compensation as of September 30, 2021 will be used for purposes of calculating bonus payout, unless Section VII.4 is applicable in which case the Executives base compensation at the time of termination of employment shall be used for purposes of calculating bonus payout. |
4. |
The Company expects that any payments earned under this Plan will be paid by December 15, 2021. |
5. |
The Plan is subject to the Companys Compensation Recoupment Policy adopted by the Board of Directors on December 9, 2020. |
6. |
The Plan is subject to the terms of any applicable Change in Control Agreement executed with a terminating Executive. |
IV. |
PERFORMANCE TARGETS AND PAYOUT PERCENTAGES |
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
CHIEF EXECUTIVE OFFICER
LEVEL 9
The Plan consists of three components, with a weighting factor assigned to each: Consolidated Net Revenues (30% weighting), Consolidated Operating Income (30% weighting), and Individual Performance (40% weighting). The Plan is designed to payout 90% of base salary at target, which is revenue of $300 million and adjusted operating income of $73 million. The Plan also includes business accelerators that are aimed at rewarding performance for revenue achievement and growth above our financial guidance and internal operating plan. Such business accelerators are effective at revenues ranging from $325 million to $370 million. The Compensation Committee shall be responsible for determining if the targets have been met and may not increase compensation payable under this Plan in excess of the amounts provided herein. Subsequent to the Compensation Committees determination that targets have been met, each Participant shall receive a cash lump sum payment of the bonus, less required payroll withholdings. In no event shall payment be made later than two and one-half (2 1⁄2) months following the Companys fiscal year end; provided¸ however, the Participant may make the deferral election described in Section VI.
See Appendices I and II for payout percentages at various levels of revenues, adjusted (non-GAAP) operating income and individual performance as well as business accelerators for achievement of revenues starting at $325 million.
V. |
NON-GAAP MEASUREMENT |
Non-GAAP items shall consist of items disclosed in the Companys Non-GAAP Financial Measures disclosures in the fiscal 2021 Form 10-K. Upon the proposal of the Compensation Committee, the Board may in its discretion consider non-GAAP items, which may include restructuring and extraordinary charges, in the calculation of Operating Income.
In the event of an acquisition during the Plan year, to the extent not already captured in the non-GAAP disclosures noted above, the Board, upon the proposal of the Compensation Committee, may in its discretion consider restructuring, purchase accounting and extraordinary charges associated with such acquisitions as disclosed in the Companys Form 10-K to be considered in the calculation of Operating Income.
Additionally, the Compensation Committee will determine the treatment of revenue and/or operating income or operating losses from acquired companies in the calculation (acquired during the fiscal year). For example, the Compensation Committee may exclude the revenue and/or operating income or loss of the acquired company from the calculation or the Compensation Committee may approve new revenue and operating income targets developed by management reflecting the impact of the acquisition.
The Compensation Committee shall evaluate certain events, in its discretion, for determination of treatment in the bonus calculation. Examples include the impact of tax legislation and the impact of implementing new accounting standards.
VI. |
DEFERRAL OF BONUS PAYMENT |
Executives may elect to defer payment of bonus to no later than January 15, 2022. Such election must be made in writing prior to March 31, 2021.
VII. |
GENERAL PROVISIONS |
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
CHIEF EXECUTIVE OFFICER
LEVEL 9
1. |
Payments will be made in a cash lump sum payment, less required payroll withholdings, and will be paid on or about December 15, 2021. |
2. |
For U.S. Participants, appropriate withholdings will be deducted from the bonus award, including income taxes, FICA, and 401k plan contributions. Appropriate withholdings will also be made for international employees based on local requirements. |
3. |
A Participants rights and interests under the Plan may not be assigned, pledged or transferred. |
4. |
A Participant who leaves during the plan year due to death, long-term disability, retirement, or as the result of a reduction in force, are eligible for a pro-rated payout of his or her target bonus (i.e., 50% of base salary) upon termination of employment. Retirement shall be defined as termination of employment at age 55 or older with greater than 10 years of service. |
5. |
Nothing in the Plan shall confer upon any Participant the right to continue in the employment of the Company or affect the right of the Company to terminate the employment of any Participant. |
6. |
It is intended that payments under the Plan qualify as short-term deferrals exempt from the requirements of Section 409A of the Code. |
7. |
A Participant with an individual performance rating of Not Achieved will not be eligible for payout, unless an exception for payment is approved by the Compensation Committee. |
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
CHIEF EXECUTIVE OFFICER
LEVEL 9
APPENDIX I
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
[***]
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
CHIEF EXECUTIVE OFFICER
LEVEL 9
APPENDIX II
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
[***]
Exhibit 10.2
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
EXECUTIVE VICE PRESIDENTS
LEVEL 8
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
OFFICERS
LEVEL 8
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS
EXHIBIT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE
COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***]
I. |
PURPOSE |
The purpose of this cash-based incentive compensation plan (the Plan) is to define a mechanism for stimulating and rewarding the achievement of business goals by eligible employees, as proposed by the Compensation Committee of the Board of Directors of the Company (the Board) and agreed by the Board.
II. |
SCOPE |
This Plan includes certain executives as designated by the CEO of Meridian Bioscience, Inc. and its subsidiaries (the Company).
III. |
ELIGIBILITY REQUIREMENTS |
Eligibility for participation in this Plan is limited to elected officers of the Company who are in an executive vice president position as determined in the sole discretion of the Compensation Committee of the Board (the Executives or Participants).
1. |
Executives hired after October 1, 2020 are eligible for a pro-rated bonus based on the number of days employed during the fiscal year. Employees hired after July 1, 2021 will not be eligible for Bonus until Fiscal Year 2022. |
2. |
Executives who terminate after September 30, 2021 but prior to the date the bonus is paid are eligible for his or her bonus, including any business accelerators noted in Section IV below, except in the case where the Executive is terminated for Cause as defined in the Meridian Bioscience, Inc. 2021 Stock Incentive Plan. |
3. |
The Executives base compensation as of September 30, 2021 will be used for purposes of calculating bonus payout, unless Section VII.4 is applicable in which case the Executives base compensation at the time of termination of employment shall be used for purposes of calculating bonus payout. |
4. |
The Company expects that any payments earned under this Plan will be paid by December 15, 2021. |
5. |
The Plan is subject to the Companys Compensation Recoupment Policy adopted by the Board of Directors on December 9, 2020. |
6. |
The Plan is subject to the terms of any applicable Change in Control Agreement executed with a terminating Executive. |
IV. |
PERFORMANCE TARGETS AND PAYOUT PERCENTAGES |
The Plan consists of three components, with a weighting factor assigned to each: Consolidated Net
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
EXECUTIVE VICE PRESIDENTS
LEVEL 8
Revenues (30% weighting), Consolidated Operating Income (30% weighting), and Individual Performance (40% weighting). The Plan is designed to payout 50% of base salary at target, which is revenue of $300 million and adjusted operating income of $73 million. The Plan also includes business accelerators that are aimed at rewarding performance for revenue achievement and growth above our financial guidance and internal operating plan. Such business accelerators are effective at revenues ranging from $325 million to $370 million. The Compensation Committee shall be responsible for determining if the targets have been met and may not increase compensation payable under this Plan in excess of the amounts provided herein. Subsequent to the Compensation Committees determination that targets have been met, each Participant shall receive a cash lump sum payment of the bonus, less required payroll withholdings. In no event shall payment be made later than two and one-half (2 1⁄2) months following the Companys fiscal year end; provided¸ however, the Participant may make the deferral election described in Section VI.
See Appendices I and II for payout percentages at various levels of revenues, adjusted (non-GAAP) operating income and individual performance as well as business accelerators for achievement of revenues starting at $325 million.
V. |
NON-GAAP MEASUREMENT |
Non-GAAP items shall consist of items disclosed in the Companys Non-GAAP Financial Measures disclosures in the fiscal 2021 Form 10-K. Upon the proposal of the Compensation Committee, the Board may in its discretion consider non-GAAP items, which may include restructuring and extraordinary charges, in the calculation of Operating Income.
In the event of an acquisition during the Plan year, to the extent not already captured in the non-GAAP disclosures noted above, the Board, upon the proposal of the Compensation Committee, may in its discretion consider restructuring, purchase accounting and extraordinary charges associated with such acquisitions as disclosed in the Companys Form 10-K to be considered in the calculation of Operating Income.
Additionally, the Compensation Committee will determine the treatment of revenue and/or operating income or operating losses from acquired companies in the calculation (acquired during the fiscal year). For example, the Compensation Committee may exclude the revenue and/or operating income or loss of the acquired company from the calculation or the Compensation Committee may approve new revenue and operating income targets developed by management reflecting the impact of the acquisition.
The Compensation Committee shall evaluate certain events, in its discretion, for determination of treatment in the bonus calculation. Examples include the impact of tax legislation and the impact of implementing new accounting standards.
VI. |
DEFERRAL OF BONUS PAYMENT |
Executives may elect to defer payment of bonus to no later than January 15, 2022. Such election must be made in writing prior to March 31, 2021.
VII. |
GENERAL PROVISIONS |
1. |
Payments will be made in a cash lump sum payment, less required payroll withholdings, and will be paid on or about December 15, 2021. |
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
EXECUTIVE VICE PRESIDENTS
LEVEL 8
2. |
For U.S. Participants, appropriate withholdings will be deducted from the bonus award, including income taxes, FICA, and 401k plan contributions. Appropriate withholdings will also be made for international employees based on local requirements. |
3. |
A Participants rights and interests under the Plan may not be assigned, pledged or transferred. |
4. |
Participants who leave during the plan year due to death, long-term disability, retirement, or as the result of a reduction in force, are eligible for a pro-rated payout of his or her target bonus (i.e., 50% of base salary) upon termination of employment. Retirement shall be defined as termination of employment at age 55 or older with greater than 10 years of service. |
5. |
Nothing in the Plan shall confer upon any Participant the right to continue in the employment of the Company or affect the right of the Company to terminate the employment of any Participant. |
6. |
It is intended that payments under the Plan qualify as short-term deferrals exempt from the requirements of Section 409A of the Code. |
7. |
Participants with an individual performance rating of Not Achieved will not be eligible for payout, unless an exception for payment is approved by the Compensation Committee. |
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
EXECUTIVE VICE PRESIDENTS
LEVEL 8
APPENDIX I
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
[***]
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
EXECUTIVE VICE PRESIDENTS
LEVEL 8
APPENDIX II
CASH-BASED INCENTIVE COMPENSATION PLAN
FISCAL YEAR 2021
[***]
Exhibit 10.3
AMENDMENT TO SHARE PURCHASE AGREEMENT
This AMENDMENT TO SHARE PURCHASE AGREEMENT (the Amendment), dated as of June 3, 2019, is entered into between GENEPOC INC., a corporation incorporated under the laws of Canada (Seller), MERIDIAN BIOSCIENCE CANADA INC., a corporation incorporated under the laws of British Columbia (Buyer), THE SHAREHOLDERS OF SELLER (the Shareholders), APRÈS-DEMAIN HOLDING SA, in its capacity of Shareholders Representative, and MERIDIAN BIOSCIENCE, INC.
RECITALS
WHEREAS on April 29, 2019, a share purchase agreement (the Purchase Agreement) was entered into between the Seller, the Buyer, the Shareholders solely for the purpose of Section 8.01 thereof, Après-Demain Holding SA solely in its capacity of Shareholders Representative, and Meridian Bioscience, Inc., solely for the purpose of Sections 2.06, 2.07 and 8.02 thereof, pursuant to which Buyer agreed to purchase, on the Closing Date (as such term is defined in the Purchase Agreement) and the Seller agreed to sell, all of shares held by Seller in the share capital of Genepoc Canada Inc. as of the Closing Date;
WHEREAS Schedule 2 to the Purchase Agreement provides, among other things, a description of the GI Panel Assay including the description of the assay specifications relating to the GI Bacterial Panel under development by the Seller;
WHEREAS on or about May 15, 2019, the Seller and the Buyer reached an agreement about removing the Lari subspecies from the GI Panel Assay;
WHEREAS on or about May 30, 2019, the Seller and the Buyer reached an agreement on a revised version of the sample calculation of the Closing Working Capital, as well as on a revised amount for the Target Working Capital; and
WHEREAS the parties hereto therefore wish to amend the Purchase Agreement as of and from the date hereof in order to reflect the above mentioned agreements.
NOW THEREFORE, in consideration of the premises and mutual agreements herein contained, and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each party), the parties hereto agree as follows:
ARTICLE 1
INTERPRETATION
1.1 |
Definitions |
In this Amendment, all defined terms shall have the meanings ascribed thereto in the Purchase Agreement, unless otherwise defined herein.
ARTICLE 2
AMENDMENT TO PURCHASE AGREEMENT
2.1 |
Replacement of Schedule 2 of the Purchase Agreement |
Schedule 2 to the Purchase Agreement is hereby deleted in its entirety and replaced by the revised and amended Schedule 2 attached hereto. All references to Schedule 2 in the Purchase Agreement, including in the definitions of GI Panel Assay and RI Assay Panel shall refer to the revised and amended Schedule 2 attached to this Amendment.
2.2 |
Replacement of Exhibit D of the Purchase Agreement |
Exhibit D to the Purchase Agreement is hereby deleted in its entirety and replaced by the revised and amended Exhibit D attached hereto. All references to Exhibit D in the Purchase Agreement, including in the definition of Sample Working Capital Statement shall refer to the revised and amended Exhibit D attached to this Amendment.
2.3 |
Amendment of Paragraph 2.08 (a) |
Paragraph 2.08 (a) of the Purchase Agreement is hereby deleted in its entirety and replaced by the following:
(a) Closing Adjustment.
(i) At the Closing, the Base Purchase Price shall be adjusted in the following manner:
(A) either (1) an increase by the amount, if any, by which the Estimated Closing Working Capital (as determined in accordance with Section 2.08(a)(ii)) is greater than CA$500,000 (the Target Working Capital), or (2) a decrease by the amount, if any, by which the Estimated Closing Working Capital is less than the Target Working Capital;
(B) a decrease by the amount of Estimated Indebtedness.
The net amount after giving effect to the adjustments listed above shall be the actual Base Cash Payment to be paid at Closing.
(ii) At least three (3) Business Days before the Closing, Seller shall prepare and deliver to Buyer a statement setting forth its good faith estimate of Closing Indebtedness assumed by the Company under the Asset Transfer Agreement (the Estimated Indebtedness) and Closing Working Capital transferred to the Company under the Asset Transfer Agreement (the Estimated Closing Working Capital), and a certificate of the Chief Financial Officer of the Seller (without personal liability) that the calculation of Estimated Indebtedness and the Estimated Closing
Working Capital Statement were prepared in accordance with CASPE applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Audited Financial Statements for the most recent fiscal year end.
2.4 |
Effect of Amendment |
Except with respect to the modifications expressly implemented in accordance herewith, the content of this Amendment shall not in any way be interpreted as modifying the terms and conditions of the Purchase Agreement and it contains no other modification, whether implicit or ancillary and no other change in any other respect. Except for Schedule 2 which shall be replaced by the revised and amended Schedule 2 attached hereto, the Purchase Agreement remains in full force and effect, unamended.
ARTICLE 3
GENERAL
3.1 |
Further Assurances |
Each of the parties hereto shall from time to time execute and deliver all such further documents and instruments and do all acts and things as another party may reasonably require in connection with this Amendment to effectively carry out or better evidence or perfect the full intent and meaning of this Amendment.
3.2 |
Successors, Assigns and Assignment |
This Amendment will enure to the benefit of and be binding upon the respective successors and permitted assigns of the parties hereto. This Amendment may not be assigned by any party other than in compliance with and concurrently with the Purchase Agreement.
3.3 |
Amendments and Waivers |
No amendment of this Amendment or further amendment to the Purchase Agreement shall be valid or binding unless set forth in writing and duly executed by all parties hereto. No waiver of any breach of any provision of this Amendment shall be effective or binding unless made in writing and signed by the party purporting to give same and, unless otherwise provided, will be limited to the specific breach waived.
3.4 |
Governing Law and Forum |
(a) This Amendment shall be governed by and construed in accordance with the internal laws of the Province of Quebec and the federal laws of Canada applicable therein and shall be treated in all respects, as a Quebec contract.
(b) Any legal suit, action or proceeding arising out of or based upon this Amendment shall be heard and determined by the courts of the province of Quebec, district of Montreal.
3.5 |
Severability |
If any provision of this Amendment is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such determination shall not impair or affect the validity, legality or enforceability of the remaining provisions hereof, and each provision is hereby declared to be separate, severable and distinct.
3.6 |
Counterparts |
This Amendment may be executed in one or more counterparts, each of which shall conclusively be deemed to be an original but all of which taken together shall be deemed to constitute one and the same agreement. A facsimile transmission of this Amendment bearing a signature on behalf of a party shall be legal and binding on such Party.
3.7 |
Language |
The parties hereto acknowledge that they have required that this Amendment and all related documents be drawn up in English. Les parties aux présentes reconnaissent avoir exigé que le présent amendement et tous les documents connexes soient rédigés en anglais.
(Remainder of this page left blank intentionally; Signature Pages Follow)
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first written above by their respective officers thereunto duly authorized.
SELLER:
GENEPOC INC. | ||
By: | /s/ Patrice Allibert | |
Name: | Patrice Allibert | |
Title: | President |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
BUYER:
MERIDIAN BIOSCIENCE CANADA INC. | ||
By: | /s/ Jack Kenny | |
Name: | Jack Kenny | |
Title: | Director |
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first written above by their respective officers thereunto duly authorized.
MERIDIAN PARENTCO:
MERIDIAN BIOSCIENCE, INC. | ||
By: | /s/ Jack Kenny | |
Name: | Jack Kenny | |
Title: | President and Chief Executive Officer |
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first written above by their respective officers thereunto duly authorized.
SHAREHOLDERS REPRESENTATIVE:
APRÈS-DEMAIN HOLDINGS SA | ||
By: | /s/ Thierry Mauvernay | |
Name: | Thierry Mauvernay | |
Title: | President |
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first written above by their respective officers thereunto duly authorized.
INFECTIO RECHERCHE INC. |
||
/s/ Michel G. Bergeron | ||
By: | Michel G. Bergeron | |
Title: |
/s/ Patrice Allibert | /s/ Sébastien Chapdelaine | |||
PATRICE ALLIBERT | SÉBASTIEN CHAPDELAINE | |||
/s/ Maurice Boissinot | /s/ Alban DAmour | |||
MAURICE BOISSINOT | ALBAN DAMOUR | |||
/s/ Ann Huletsky | /s/ Regis Peytavi | |||
ANN HULETSKY | REGIS PEYTAVI | |||
/s/ Michel G. Bergeron | /s/ Marie-Josée Paré | |||
MICHEL G. BERGERON | MARIE-JOSÉE PARÉ | |||
/s/ Herbert Torfs | Jean Côté | |||
HERBERT TORFS | JEAN CÔTÉ | |||
/s/ Dany LeBlanc |
|
|||
DANY LEBLANC |
Exhibit 10.4
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS
EXHIBIT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE
COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***]
AMENDMENT NO. 3 TO SHARE PURCHASE AGREEMENT
This AMENDMENT NO. 3 TO SHARE PURCHASE AGREEMENT dated as of December 21, 2020, is entered into between APRÈS-DEMAIN DIAGNOSTICS INC. (formerly known as Genepoc Inc.), a corporation incorporated under the laws of Canada (Seller), MERIDIAN BIOSCIENCE CANADA INC., a corporation incorporated under the laws of British Columbia (Buyer), APRÈS-DEMAIN SA (formerly known as APRÈS-DEMAIN HOLDING SA), in its capacity of Shareholders Representative, and MERIDIAN BIOSCIENCE, INC.
RECITALS
WHEREAS on April 29, 2019, a share purchase agreement (as amended by the Amendments No. 1 and No. 2 dated respectively June 3, 2019 and September 29, 2020, the Purchase Agreement) was entered into between the Seller, Meridian Bioscience Canada Inc. (a predecessor by amalgamation of Buyer), the Shareholders solely for the purpose of Sections 5.03, 8.01 and 10.05 thereof, Après-Demain SA (formerly known as Après-Demain Holding SA) solely in its capacity of Shareholders Representative, and Meridian Bioscience, Inc., solely for the purpose of Sections 2.06, 2.07 and 8.02 thereof, pursuant to which Meridian Bioscience Canada Inc. (a predecessor by amalgamation of Buyer) agreed to purchase, on the Closing Date (as such term is defined in the Purchase Agreement) and the Seller agreed to sell, all of the shares held by Seller in the share capital of Genepoc Canada Inc. (defined in the Purchase Agreement as the Company) as of the Closing Date;
WHEREAS Meridian Bioscience Canada Inc. (a predecessor by amalgamation of Buyer) and the Company amalgamated on June 3, 2019, to continue as the Buyer;
WHEREAS by Section 10.05 of the Purchase Agreement, Après-Demain SA was appointed as Shareholders Representative whereby it can act as agent, proxy and attorney-in-fact for each Shareholder in order, among other matters, (b) to execute and deliver on behalf of such Shareholder any amendment or waiver hereto, (c) to take all other actions to be taken by or on behalf of such Shareholder in connection herewith;
WHEREAS by Section 10.10 of the Purchase Agreement, the Purchase Agreement may only be amended, modified or supplemented by an agreement in writing signed by Buyer, Seller and Shareholders Representative;
WHEREAS Schedule 2 to the Purchase Agreement provides, among other things, a description of the RI Panel Assay including the description of the assay specifications relating to the RI Viral Panel under development by the Seller;
WHEREAS the Seller and the Buyer have reached an agreement to revise the RI Viral Panel as described on Schedule 2 to the Purchase Agreement in order to remove the SARS-COV-2 from the targets; and
WHEREAS the parties hereto therefore wish to amend the Purchase Agreement as of and from the date hereof in order to reflect, amongst others, the above mentioned agreements as well as other changes arising therefrom or related thereto.
NOW THEREFORE, in consideration of the premises and mutual agreements herein contained, and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each party), the parties hereto agree as follows:
ARTICLE 1
INTERPRETATION
1.1 |
Definitions |
In this Amendment No. 3 (as defined below), all defined terms shall have the meanings ascribed thereto in the Purchase Agreement, unless otherwise defined herein.
ARTICLE 2
AMENDMENT TO PURCHASE AGREEMENT
2.1 |
Amendment to Article IDefinitions |
(i) One additional definition shall be added to Article I of the Purchase Agreement which state the following:
Amendment No. 3 means the Amendment No. 3 to Share Purchase Agreement dated December 21, 2020 by and between Seller, Buyer, Shareholders Representative and Meridian ParentCo.
(ii) The definitions Amendment No. 2 is hereby deleted and replaced by the following:
Amendment No. 2 means the Amendment No. 2 to Share Purchase Agreement dated September 29, 2020 by and between Seller, Buyer, Shareholders Representative and Meridian ParentCo.
2.2 |
Replacement of Schedule 2 of the Purchase Agreement |
Schedule 2 to the Purchase Agreement is hereby deleted in its entirety and replaced by the revised and amended Schedule 2 attached hereto. All references to Schedule 2 in the Purchase Agreement, including in the definitions of GI Panel Assay and RI Panel Assay shall refer to the revised and amended Schedule 2 attached to this Amendment No. 3.
ARTICLE 3
GENERAL
3.1 |
Shareholders Representative |
The Shareholders Representative represents and warrants to the Buyer and to Meridian Bioscience, Inc. that (i) it has not renounced or otherwise terminated the mandate given to it in the Purchase Agreement to represent the Shareholders as set forth in the Purchase Agreement and (ii) it has not received any notice from any Shareholder that such Shareholder has or will renounce the mandate given by it in the Purchase Agreement to the Shareholders Representative, and that accordingly the Shareholders Representative has the right to bind the Shareholders for the purposes set forth in this Amendment No. 3.
3.2 |
Further Assurances |
Each of the parties hereto shall from time to time execute and deliver all such further documents and instruments and do all acts and things as another party may reasonably require in connection with this Amendment No. 3 to effectively carry out or better evidence or perfect the full intent and meaning of this Amendment No. 3.
- 2 -
3.3 |
Successors, Assigns and Assignment |
This Amendment No. 3 will enure to the benefit of and be binding upon the respective successors and permitted assigns of the parties hereto. This Amendment No. 3 may not be assigned by any party other than in compliance with and concurrently with the Purchase Agreement.
3.4 |
Amendments and Waivers |
No amendment of this Amendment No. 3 or further amendment to the Purchase Agreement shall be valid or binding unless set forth in writing and duly executed by all parties hereto. No waiver of any breach of any provision of this Amendment No. 3 shall be effective or binding unless made in writing and signed by the party purporting to give same and, unless otherwise provided, will be limited to the specific breach waived.
3.5 |
Governing Law and Forum |
(a) This Amendment No. 3 shall be governed by and construed in accordance with the internal laws of the Province of Quebec and the federal laws of Canada applicable therein and shall be treated in all respects, as a Quebec contract.
(b) Any legal suit, action or proceeding arising out of or based upon this Amendment No. 3 shall be heard and determined by the courts of the province of Quebec, district of Montreal.
3.6 |
Severability |
If any provision of this Amendment No. 3 is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such determination shall not impair or affect the validity, legality or enforceability of the remaining provisions hereof, and each provision is hereby declared to be separate, severable and distinct.
3.7 |
Counterparts |
This Amendment No. 3 may be executed in one or more counterparts, each of which shall conclusively be deemed to be an original but all of which taken together shall be deemed to constitute one and the same agreement. A facsimile transmission of this Amendment No. 3 bearing a signature on behalf of a party shall be legal and binding on such Party.
3.8 |
Language |
The parties hereto acknowledge that they have required that this Amendment No. 3 and all related documents be drawn up in English. Les parties aux présentes reconnaissent avoir exigé que le présent amendement et tous les documents connexes soient rédigés en anglais.
(Remainder of this page left blank intentionally; Signature Pages Follow)
- 3 -
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be executed as of the date first written above by their respective officers thereunto duly authorized.
SELLER: |
APRÈS-DEMAIN DIAGNOSTICS INC. | ||
By: | /s/ Tanja Dowe | |
Name: | Tanje Dowe | |
Title: | President |
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be executed as of the date first written above by their respective officers thereunto duly authorized.
BUYER: |
MERIDIAN BIOSCIENCE CANADA INC. | ||
By: | /s/ Bryan Baldasare | |
Name: | Bryan Baldasare | |
Title: | Director |
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be executed as of the date first written above by their respective officers thereunto duly authorized.
MERIDIAN PARENTCO: |
MERIDIAN BIOSCIENCE, INC. | ||
By: | /s/ Bryan Baldasare | |
Name: | Bryan Baldasare | |
Title: | EVP, CFO |
- 6 -
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be executed as of the date first written above by their respective officers thereunto duly authorized.
SHAREHOLDERS REPRESENTATIVE: |
APRÈS-DEMAIN SA | ||
By: | /s/ Thierry Mauvernay | |
Name: | Thierry Mauvernay | |
Title: | President |
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SCHEDULE 2
Molecular IVD Assay Specifications: GI Bacterial Panel and RI Viral Panel
[***]
Exhibit 31.1
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a)
I, Jack Kenny, certify that:
1. |
I have reviewed this quarterly report on Form 10-Q of Meridian Bioscience, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) |
Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles; |
c) |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: February 5, 2021 |
/s/ Jack Kenny |
Jack Kenny |
Chief Executive Officer |
Exhibit 31.2
Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a)
I, Bryan T. Baldasare, certify that:
1. |
I have reviewed this quarterly report on Form 10-Q of Meridian Bioscience, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) |
Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles; |
c) |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: February 5, 2021 |
/s/ Bryan T. Baldasare |
Bryan T. Baldasare |
Executive Vice President and Chief Financial Officer |
Exhibit 32
Meridian Bioscience, Inc.
Certification of Chief Executive Officer and Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the filing with the Securities and Exchange Commission of the Quarterly Report of Meridian Bioscience, Inc. (the Company) on Form 10-Q for the period ended December 31, 2020 (the Report), the undersigned officers of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of their knowledge:
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Jack Kenny |
Jack Kenny |
Chief Executive Officer |
February 5, 2021 |
/s/ Bryan T. Baldasare |
Bryan T. Baldasare |
Executive Vice President and Chief Financial Officer |
February 5, 2021 |