☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐ |
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
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Name of each exchange on which registered
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Common Shares, No Par Value
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VIVO
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The NASDAQ Stock Market LLC
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(NASDAQ Global Select Market)
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Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
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Page
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Item 1
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5
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Item 1A
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11
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Item 1B
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Item 2
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Item 3
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Item 4
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Item 5
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Item 6
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Item 7
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26
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Item 7A
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37
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Item 8
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38
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Item 9
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74
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Item 9A
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74
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Item 9B
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75
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Item 10
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75
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Item 11
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75
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Item 12
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76
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Item 13
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76
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Item 14
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76
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Item 15
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76
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Item 16
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78
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Type of Segment Information
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Location within Form
10-K
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Physical locations and activities | Item 2. “Properties” | |
Revenue by geographic region | Item 7. “Management’s Discussion and Analysis of Financial Condition & Results of Operations” (hereafter “MD&A”) | |
Financial information | Item 8. “Note 15 of Consolidated Financial Statements” |
Meridian Employees
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2021
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|||
Salaried workforce
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543 | |||
Managers and above
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159 | |||
Part-time employees
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27 | |||
Average age
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43 | |||
Average length of service in years
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7 | |||
Employee turnover rate (voluntary)
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19 | % | ||
Fiscal 2021 net revenues per employee (in thousands)
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$ | 415 |
Equal Employment Opportunity Table (by number of employees)
U.S. Employee Diversity as of September 30, 2021
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||||||||||||||||||||||||||||||
Job category
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Gender
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White
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Black/African
American |
Hispanic/Latino
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Asian
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American
Indian/Alaskan Native |
Two
or more races |
Total
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||||||||||||||||||||||
Executive/senior level officials and managers
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Male | 12 | — | — | — | — | — | 12 | ||||||||||||||||||||||
Female | 3 | — | 1 | — | — | — | 4 | |||||||||||||||||||||||
First/mid-level
officials and managers
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Male | 41 | 4 | 2 | 3 | — | — | 50 | ||||||||||||||||||||||
Female | 36 | 4 | — | 4 | — | 1 | 45 | |||||||||||||||||||||||
Professionals
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Male | 60 | 4 | 4 | 5 | — | 1 | 74 | ||||||||||||||||||||||
Female | 71 | 9 | 5 | 9 | — | 2 | 96 | |||||||||||||||||||||||
All other
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Male | 59 | 11 | 8 | 5 | — | 1 | 84 | ||||||||||||||||||||||
Female | 83 | 18 | 7 | 8 | — | 2 | 118 | |||||||||||||||||||||||
Total
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Male | 172 | 19 | 14 | 13 | — | 2 | 220 | ||||||||||||||||||||||
Female | 193 | 31 | 13 | 21 | — | 5 | 263 |
• |
Our financial condition, results of operations and cash flows could be adversely affected by the ongoing and evolving
COVID-19
pandemic.
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• |
Net revenues for our Diagnostics segment may be impacted by our reliance upon large customers in North America, seasonal factors and sporadic outbreaks, and changing diagnostic market conditions.
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• |
Net revenues for our Life Science segment may be impacted by customer concentrations and buying patterns.
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• |
Intense competition could adversely affect our profitability and operating results.
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• |
We expect to continue to face increased competition resulting from the expiration of our
H. pylori
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• |
We may be unable to protect or obtain adequate patent protection for intellectual property that we utilize or intend to utilize.
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• |
Product infringement claims by other companies could result in costly disputes and could limit our ability to sell our products.
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• |
We may be unable to develop new products or acquire products on favorable terms.
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• |
We may be unable to successfully integrate operations or to achieve expected cost savings from acquisitions we make.
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• |
The effective tax rate of the Company may be negatively impacted by changes in the mix of earnings as well as future changes to tax laws in global jurisdictions in which we operate.
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• |
Significant interruptions in production at our principal manufacturing facilities and/or third-party manufacturing facilities could adversely affect our business and operating results.
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• |
We depend on sole-source suppliers for certain critical raw materials, components and finished products. A supply interruption could adversely affect our business.
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• |
Our ability to meet future customer demand for selected products is dependent upon our ability to successfully manage our manufacturing capacity and supply chains.
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• |
Increased prices for, poor quality of, or extended inability to source raw materials or services used in our products, and supply chain disruptions, could adversely affect profitability.
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• |
We are subject to comprehensive regulation, and our ability to earn profits may be restricted by these regulations.
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• |
If we or our third-party vendors fail to comply with FDA regulations relating to the manufacturing of our products or any component part, we may be subject to fines, injunctions and penalties, and our ability to commercially distribute and sell our products may be negatively impacted.
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• |
We incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies in the U.S., and failure to comply with these laws could harm our business and the price of our common stock.
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• |
We could be adversely affected by health care reform legislation.
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• |
Efforts to reduce the U.S. federal deficit could adversely affect our results of operations.
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• |
Global market, political, environmental, and economic conditions, including those related to the financial markets, could have a material adverse effect on our operating results, financial condition, and liquidity.
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• |
We depend on international net revenues, and our operating results may be adversely impacted by foreign currency, regulatory or other developments affecting international markets.
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• |
New tariffs and other trade measures could adversely affect our operating results.
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• |
If product liability lawsuits are successfully brought against us, we may incur substantial liabilities and may have to limit or cease sales of our products.
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• |
The market price of our common stock may be volatile and fluctuate significantly, which could result in substantial losses for stockholders and subject us to litigation.
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• |
Our business could be negatively impacted as a result of shareholder activism, an unsolicited takeover proposal or a proxy contest.
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• |
The authority of our board to issue preferred stock and the effects of certain provisions of Ohio corporation law may discourage takeover bids.
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• |
One or more cybersecurity incidents may adversely impact our financial condition, results of operations and reputation.
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• |
Our business could be negatively affected if we are unable to attract, hire and retain key personnel.
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• |
Our bank credit agreement imposes restrictions with respect to our operations, which could adversely impact our business.
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• |
decreased volume of testing and related sales of certain of our Diagnostics segment products as a result of disruptions to health care providers and limitations on the ability of providers to administer tests;
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• |
disruptions or restrictions on the ability of the Company’s, our collaborators’, or our suppliers’ personnel to travel, and temporary closures of our facilities, or the facilities of our collaborators or suppliers;
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• |
limitations on employee resources that would otherwise be focused on the development of our products, the processing of our diagnostic tests, and/or the conduct of our clinical trials, because of illness of employees or their families, or requirements imposed on employees to avoid contact with large groups of people; and
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• |
delays in necessary interactions with local regulators, ethics committees, and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees.
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• |
interruption in the transportation of materials to us and finished goods to our customers, including conditions where recovery from natural disasters may be delayed due to country-specific infrastructure and resources;
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• |
differences in terms of sale, including payment terms;
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• |
local product preferences and product requirements;
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• |
changes in a country’s or region’s political or economic condition, including with respect to safety and health issues;
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• |
trade protection measures and import or export licensing requirements;
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• |
unexpected changes in laws or regulatory requirements, including unfavorable changes with respect to tax, trade or sanctions compliance matters;
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• |
limitations on ownership and on repatriation of earnings and cash;
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• |
difficulty in staffing and managing widespread operations;
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• |
differing labor regulations;
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• |
difficulties in enforcing contract and property rights under local law;
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• |
difficulties in implementing restructuring actions on a timely or comprehensive basis; and
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• |
differing protection of intellectual property.
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1. |
The six companies included in the Company’s first customized peer group (“2020 Peer Group”) are:
Bio-Rad
Laboratories, Inc., bioMerieux S.A., Myriad Genetics, Inc., OraSure Technologies, Inc., Quidel Corporation, and Trinity Biotech Plc.
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2. |
The ten companies included in the Company’s second customized peer group (“2021 Peer Group”) are:
Bio-Rad
Laboratories, Inc.,
Bio-Techne
Corporation, bioMerieux S.A., DiaSorin S.p.a., Hologic, Inc., Myriad Genetics, Inc., OraSure Technologies, Inc., Qiagen N.V., Quidel Corporation, and Trinity Biotech Plc.
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• |
Volume growth in the gastrointestinal product family benefitting from: (i) a full year of revenue from sales of BreathID instruments and tests, acquired in the April 2020 Exalenz acquisition; and (ii) two months of revenue from sales of the BreathTek product, acquired in late July 2021;
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• |
Ongoing pricing pressure on our
H. pylori
|
• |
Volume declines from sales of respiratory illness products, comprised of tests for Group A Strep, Mycoplasma pneumonia, Influenza, and Pertussis, among others, reflecting the decreased focus on testing for these illnesses throughout the
COVID-19
pandemic; and
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• |
Volume declines from sales of blood chemistry products due to the ongoing LeadCare product recall, which commenced in May 2021 ($2,136 decrease in revenue in fiscal 2021, compared to fiscal 2020).
|
• |
Unprecedented demand for the Life Science segment’s products by diagnostic test manufacturers for use in
COVID-19
related tests, resulting in
COVID-19-related
|
• |
Revenue from core Life Science products increasing approximately 26% over fiscal 2020, due in large part from obtaining business from
COVID-19
customers who are now using our products for
non-COVID-19
|
2021 | 2020 |
2021 vs. 2020
Inc (Dec) |
||||||||||
Gross Profit
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$ | 201,148 | $ | 156,248 | 29 | % | ||||||
Gross Profit Margin
|
63 | % | 62 | % | 1 point |
Research &
Development |
Selling &
Marketing |
General &
Administrative |
Other
(1)(2)
|
Total Operating
Expenses |
||||||||||||||||
Fiscal 2020:
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||||||||||||||||||||
Diagnostics
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$ | 21,454 | $ | 21,172 | $ | 23,233 | $ | (1,916 | ) | $ | 63,943 | |||||||||
Life Science
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2,275 | 5,314 | 11,755 | 200 | 19,544 | |||||||||||||||
Corporate
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— | — | 9,357 | 2,080 | 11,437 | |||||||||||||||
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Total 2020 Expenses
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$ | 23,729 | $ | 26,486 | $ | 44,345 | $ | 364 | $ | 94,924 | ||||||||||
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Fiscal 2021:
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Diagnostics
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$ | 21,406 | $ | 21,430 | $ | 24,915 | $ | 5,079 | $ | 72,830 | ||||||||||
Life Science
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2,505 | 5,350 | 13,265 | — | 21,120 | |||||||||||||||
Corporate
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— | — | 11,361 | 2,803 | 14,164 | |||||||||||||||
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Total 2021 Expenses
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$ | 23,911 | $ | 26,780 | $ | 49,541 | $ | 7,882 | $ | 108,114 | ||||||||||
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(1) |
Diagnostics segment fiscal 2020 reflects negative expense amount due to $6,293 adjustment to fair value of the acquisition consideration related to GenePOC.
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(2) |
LeadCare product recall expenses are included within the Diagnostics segment’s fiscal 2021 Other expenses.
|
• |
$5,600 in LeadCare product recall expenses within our Diagnostics segment;
|
• |
$1,400 increase in purchase accounting amortization within our Diagnostics segment, stemming from both the Exalenz and BreathTek acquisitions;
|
• |
a full year of administrative expenses within our Diagnostics segment related to the Exalenz acquisition completed in April 2020;
|
• |
higher commercial insurance costs for Directors & Officers and Property & Casualty coverages within Corporate; and
|
• |
the adjustment to the fair value of the acquisition consideration as the result of the settlement in fiscal 2021 resulting in a $5,384 year-over-year increase in expense within our Diagnostics segment.
|
(i) |
payment of consideration holdback and contingent consideration settlement related to the fiscal 2019 GenePOC acquisition ($25,000);
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(ii) |
acquisition of the BreathTek business, net of $1,000 holdback ($18,585);
|
(iii) |
funding of capital expenditures, which were primarily comprised of manufacturing expansion related to Revogene, net of $1,500 RADx grant monies received ($16,812); and
|
(iv) |
net paydown on revolving credit facility and Israeli government grant obligations ($8,824 and $5,297, respectively).
|
Total |
Less than 1
Year |
1-3 Years
|
4-5 Years
|
More than
5 Years |
||||||||||||||||
Operating leases
(1)
|
$ | 6,239 | $ | 2,194 | $ | 2,736 | $ | 1,244 | $ | 65 | ||||||||||
Purchase obligations
(2)
|
51,295 | 49,537 | 1,554 | 204 | — | |||||||||||||||
Acquisition price holdback
(3)
|
1,000 | — | 1,000 | — | — | |||||||||||||||
Uncertain income tax positions liability and interest
(4)
|
870 | 870 | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total
|
$ | 59,404 | $ | 52,601 | $ | 5,290 | $ | 1,448 | $ | 65 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) |
Meridian and its subsidiaries are parties to a number of operating lease agreements around the world, the majority of which relate to office and warehouse building leases expiring at various dates.
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(2) |
Purchase obligations relate primarily to outstanding purchase orders for machinery and equipment, inventory, including instruments, service items, and research and development activities. These contractual commitments are not in excess of expected production requirements over the next twelve months.
|
(3) |
Pursuant to the purchase agreement related to the July 31, 2021 acquisition of the BreathTek business, Meridian’s remaining consideration to be paid totals $1,000 and is comprised solely of a purchase price holdback.
|
(4) |
Due to inherent uncertainties in the timing of settlement of tax positions, we are unable to estimate the timing of the effective settlement of these obligations.
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Accounting Policy
|
Location
Within Consolidated Financial Statements |
Examples of Key Estimate Assumptions
|
||
Goodwill | Note 1(h) | Discounted cash flow assumptions (e.g., long-term growth rates, discount rate, EBITDA) | ||
Revenue Recognition | Note 1(i) | Distributor price adjustments and fee accruals | ||
Income Taxes | Note 1(l) and Note 11 | Uncertain positions and state apportionment factors |
39 | ||||
40 | ||||
44 | ||||
45 | ||||
46 | ||||
47 | ||||
49 | ||||
50 | ||||
80 |
/s/ Jack Kenny
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/s/ Bryan T. Baldasare
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|||
Jack Kenny | Bryan T. Baldasare | |||
Chief Executive Officer | Executive Vice President and | |||
November 23, 2021 | Chief Financial Officer | |||
November 23, 2021 |
Evaluation of Goodwill Impairment for the Diagnostics Reporting Unit
|
||
Description of the Matter
|
At September 30, 2021, the Company has recorded goodwill of $94.9 million within the Diagnostics reporting unit (within the Diagnostics reportable segment). As discussed in Note 1 to the consolidated financial statements, goodwill is tested for impairment annually at the beginning of the fourth quarter, or more frequently if indicators of potential impairment exist. Auditing management’s annual goodwill impairment test related to Diagnostics reporting unit was especially challenging due to the complexity of forecasting the long-term cash flows of the Diagnostics reporting unit and the estimation uncertainty of certain assumptions included within such forecasts. The estimation uncertainty was primarily due to the sensitivity of the Diagnostic reporting unit’s fair value to changes in the significant assumptions used in the income approach, such as forecasted net revenues, earnings before interest, taxes, depreciation and amortization (EBITDA) margins, long-term growth rates, and discount rates. These significant assumptions require a high degree of estimation and judgment based on an evaluation of historical performance, current industry and macroeconomic conditions. |
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s annual goodwill impairment process, including controls over management’s review of the significant assumptions described above and controls over management’s review of its financial forecasts and carrying value of the Diagnostics reporting unit.
To test the estimated fair value of the Diagnostics reporting unit, we performed audit procedures that included, among others, involving an internal valuation specialist to assist in our evaluation of the methodologies and certain significant assumptions used by the Company. We assessed the reasonableness of the Company’s assumptions around forecasted net revenues, EBITDA margins, long-term growth rates, and discount rates by comparing those assumptions to recent historical performance, current economic and industry trends, and financial forecasts. We also assessed the reasonableness of estimates included in the Company’s Diagnostics reporting unit financial forecast by evaluating how such assumptions compared to economic, industry, and peer expectations. We evaluated management’s historical accuracy of forecasting Diagnostics reporting unit net revenues and EBITDA margins by comparing past forecasts to subsequent actual activity. We performed various sensitivity analyses around these significant assumptions to understand the impact on the fair value calculation.
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For the Year Ended September 30,
|
2021
|
2020 | 2019 | |||||||||
Net Revenues
|
$
|
317,896
|
$ | 253,667 | $ | 201,014 | ||||||
Cost of Sales
|
|
116,748
|
97,419 | 82,286 | ||||||||
|
|
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|
|||||||
Gross Profit
|
|
201,148
|
156,248 | 118,728 | ||||||||
|
|
|
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|
|||||||
Operating Expenses:
|
||||||||||||
Research and development
|
|
23,911
|
23,729 | 17,760 | ||||||||
Selling and marketing
|
|
26,780
|
26,486 | 27,995 | ||||||||
General and administrative
|
|
49,541
|
44,345 | 34,044 | ||||||||
Product recall costs
|
|
5,596
|
— | — | ||||||||
Selected legal costs
|
|
2,803
|
2,080 | 1,583 | ||||||||
Acquisition-related costs
|
|
392
|
3,890 | 1,808 | ||||||||
Change in fair value of acquisition
consideration
and settlement
|
|
(909
|
)
|
(6,293 | ) | — | ||||||
Restructuring costs
|
|
—
|
687 | 2,839 | ||||||||
|
|
|
|
|
|
|||||||
Total Operating Expenses
|
|
108,114
|
94,924 | 86,029 | ||||||||
|
|
|
|
|
|
|||||||
Operating Income
|
|
93,034
|
61,324 | 32,699 | ||||||||
Other Income (Expense):
|
||||||||||||
Interest income
|
|
—
|
142 | 681 | ||||||||
Interest expense
|
|
(1,878
|
)
|
(2,632 | ) | (1,945 | ) | |||||
RADx grant income
|
|
1,000
|
— | — | ||||||||
Other, net
|
|
(1,705
|
)
|
459 | 122 | |||||||
|
|
|
|
|
|
|||||||
Total Other Expense, Net
|
|
(2,583
|
)
|
(2,031 | ) | (1,142 | ) | |||||
|
|
|
|
|
|
|||||||
Earnings Before Income Taxes
|
|
90,451
|
59,293 | 31,557 | ||||||||
Income Tax Provision
|
|
19,044
|
13,107 | 7,175 | ||||||||
|
|
|
|
|
|
|||||||
Net Earnings
|
$
|
71,407
|
$ | 46,186 | $ | 24,382 | ||||||
|
|
|
|
|
|
|||||||
Earnings Per Share Data:
|
||||||||||||
Basic earnings per common share
|
$
|
1.65
|
$ | 1.08 | $ | 0.57 | ||||||
Diluted earnings per common share
|
$
|
1.62
|
$ | 1.07 | $ | 0.57 | ||||||
Common shares used for basic earnings per common share
|
|
43,259
|
42,855 | 42,571 | ||||||||
Effect of dilutive stock options and restricted share units
|
|
753
|
319 | 328 | ||||||||
|
|
|
|
|
|
|||||||
Common shares used for diluted earnings per common share
|
|
44,012
|
43,174 | 42,899 | ||||||||
|
|
|
|
|
|
|||||||
Dividends declared per common share
|
$
|
—
|
$ | — | $ | 0.25 | ||||||
Anti-Dilutive Securities:
|
||||||||||||
Common share options and restricted share units
|
|
203
|
893 | 1,129 |
For the Year Ended September 30,
|
2021
|
2020 | 2019 | |||||||||
Net Earnings
|
$
|
71,407
|
$ | 46,186 | $ | 24,382 | ||||||
Other Comprehensive Income (Loss):
|
||||||||||||
Foreign currency translation adjustment
|
|
1,780
|
3,884 | (802 | ) | |||||||
Unrealized gain (loss) on cash flow hedge
|
|
510
|
(713 | ) | (1,159 | ) | ||||||
Reclassification of amortization of gain on cash flow hedge
|
|
(154
|
)
|
(308 | ) | (102 | ) | |||||
Income taxes related to items of other comprehensive income (loss)
|
|
(78
|
)
|
252 | 465 | |||||||
|
|
|
|
|
|
|||||||
Other Comprehensive Income (Loss), Net of Tax
|
|
2,058
|
3,115 | (1,598 | ) | |||||||
|
|
|
|
|
|
|||||||
Comprehensive Income
|
$
|
73,465
|
$ | 49,301 | $ | 22,784 | ||||||
|
|
|
|
|
|
For the Year Ended September 30,
|
2021
|
2020 | 2019 | |||||||||
Cash Flows From Operating Activities
|
||||||||||||
Net earnings
|
$
|
71,407
|
$ | 46,186 | $ | 24,382 | ||||||
Non-cash items included in net earnings:
|
||||||||||||
Depreciation of property, plant and equipment
|
|
6,510
|
5,823 | 5,433 | ||||||||
Amortization of intangible assets
|
|
8,776
|
7,744 | 4,531 | ||||||||
Stock compensation expense
|
|
4,156
|
3,802 | 3,251 | ||||||||
Deferred income taxes
|
|
(3,835
|
)
|
760 | (817 | ) | ||||||
Losses on dispositions of long-lived assets
|
|
9
|
64 | 632 | ||||||||
Change in fair value of acquisition consideration and settlement
|
|
(909
|
)
|
(6,293 | ) | — | ||||||
Change in the following, net of acquisitions:
|
||||||||||||
Accounts receivable
|
|
(12,766
|
)
|
(971 | ) | (2,215 | ) | |||||
Inventories
|
|
(7,800
|
)
|
(18,977 | ) | 3,841 | ||||||
Prepaid expenses and other current assets
|
|
(3,711
|
)
|
(153 | ) | (2,143 | ) | |||||
Accounts payable and accrued expenses
|
|
6,346
|
7,248 | (2,315 | ) | |||||||
Income taxes payable
|
|
(329
|
)
|
1,435 | 1,793 | |||||||
Other, net
|
|
(989
|
)
|
1,308 | (198 | ) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities
|
|
66,865
|
47,976 | 36,175 | ||||||||
|
|
|
|
|
|
|||||||
Cash Flows From Investing Activities
|
||||||||||||
Purchase of property, plant and equipment
|
|
(18,312
|
)
|
(3,299 | ) | (3,797 | ) | |||||
RADx grant proceeds offsetting cost of equipment
|
|
1,500
|
— | — | ||||||||
Payment of acquisition consideration holdback
|
|
(5,000
|
)
|
— | — | |||||||
Disposals of property, plant and equipment
|
|
—
|
— | 669 | ||||||||
Acquisitions, net of cash acquired and holdback
|
|
(18,585
|
)
|
(51,299 | ) | (45,324 | ) | |||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities
|
|
(40,397
|
)
|
(54,598 | ) | (48,452 | ) | |||||
|
|
|
|
|
|
|||||||
Cash Flows From Financing Activities
|
||||||||||||
Proceeds from revolving credit facility
|
|
10,000
|
50,000 | 75,824 | ||||||||
Payment of acquisition consideration
|
|
(20,000
|
)
|
— | — | |||||||
Payment on revolving credit facility
|
|
(18,824
|
)
|
(57,000 | ) | — | ||||||
Payment on government grant obligations
|
|
(5,297
|
)
|
— | — | |||||||
Payment of debt issuance costs
|
|
—
|
(116 | ) | (489 | ) | ||||||
Payments on term loan
|
|
—
|
— | (50,250 | ) | |||||||
Proceeds from exercise of stock options
|
|
3,052
|
3,559 | 443 | ||||||||
Dividends paid
|
|
—
|
— | (10,612 | ) | |||||||
|
|
|
|
|
|
|||||||
Net cash (used in) provided by financing activities
|
|
(31,069
|
)
|
(3,557 | ) | 14,916 | ||||||
|
|
|
|
|
|
|||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
|
858
|
1,296 | (1,005 | ) | |||||||
Net (Decrease) Increase in Cash and Cash Equivalents
|
|
(3,743
|
)
|
(8,883 | ) | 1,634 | ||||||
Cash and Cash Equivalents at Beginning of Period
|
|
53,514
|
62,397 | 60,763 | ||||||||
|
|
|
|
|
|
|||||||
Cash and Cash Equivalents at End of Period
|
$
|
49,771
|
$ | 53,514 | $ | 62,397 | ||||||
|
|
|
|
|
|
As of September 30,
|
2021
|
2020 | ||||||
Assets
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
49,771
|
$ | 53,514 | ||||
Accounts receivable, less allowances of $1,078 and $513, respectively
|
|
53,568
|
38,512 | |||||
Inventories, net
|
|
76,842
|
61,264 | |||||
Prepaid expenses and other current assets
|
|
12,626
|
8,900 | |||||
|
|
|
|
|||||
Total Current Assets
|
|
192,807
|
162,190 | |||||
|
|
|
|
|||||
Property, Plant and Equipment:
|
||||||||
Land
|
|
989
|
991 | |||||
Buildings and improvements
|
|
32,765
|
32,188 | |||||
Machinery, equipment and furniture
|
|
78,410
|
69,854 | |||||
Construction in progress
|
|
9,991
|
1,200 | |||||
|
|
|
|
|||||
Subtotal
|
|
122,155
|
104,233 | |||||
Less: accumulated depreciation and amortization
|
|
78,941
|
73,113 | |||||
|
|
|
|
|||||
Net Property, Plant and Equipment
|
|
43,214
|
31,120 | |||||
|
|
|
|
|||||
Other Assets:
|
||||||||
Goodwill
|
|
114,668
|
114,186 | |||||
Other intangible assets, net
|
|
84,151
|
83,197 | |||||
Right-of-use assets, net
|
|
5,786
|
6,336 | |||||
Deferred income taxes
|
|
8,731
|
7,647 | |||||
Other assets
|
|
365
|
585 | |||||
|
|
|
|
|||||
Total Other Assets
|
|
213,701
|
211,951 | |||||
|
|
|
|
|||||
Total Assets
|
$
|
449,722
|
$ | 405,261 | ||||
|
|
|
|
As of September 30,
|
2021
|
2020 | ||||||
Liabilities and Shareholders’ Equity
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$
|
11,701
|
$ | 11,969 | ||||
Accrued employee compensation costs
|
|
16,853
|
16,661 | |||||
Accrued product recall costs
|
|
5,100
|
— | |||||
Current portion of acquisition consideration
|
|
—
|
12,619 | |||||
Current operating lease obligations
|
|
1,990
|
1,789 | |||||
Current government grant obligations
|
|
638
|
600 | |||||
Other accrued expenses
|
|
7,027
|
5,362 | |||||
Income taxes payable
|
|
3,848
|
3,524 | |||||
|
|
|
|
|||||
Total Current Liabilities
|
|
47,157
|
52,524 | |||||
|
|
|
|
|||||
Non-Current Liabilities:
|
||||||||
Acquisition consideration
|
|
1,000
|
13,290 | |||||
Post-employment benefits
|
|
2,253
|
2,493 | |||||
Fair value of interest rate swaps
|
|
203
|
713 | |||||
Long-term operating lease obligations
|
|
3,932
|
4,678 | |||||
Long-term debt
|
|
60,000
|
68,824 | |||||
Government grant obligations
|
|
5,176
|
10,524 | |||||
Long-term income taxes payable
|
|
469
|
549 | |||||
Deferred income taxes
|
|
1,055
|
3,804 | |||||
Other non-current liabilities
|
|
175
|
233 | |||||
|
|
|
|
|||||
Total Non-Current Liabilities
|
|
74,263
|
105,108 | |||||
|
|
|
|
|||||
Commitments and Contingencies
|
||||||||
Shareholders’ Equity:
|
||||||||
Preferred stock, no par value; 1,000,000 shares authorized; none issued
|
|
—
|
|
— | ||||
Common shares, no par value; 71,000,000 shares authorized, 43,361,898 and 43,068,842 issued, respectively
|
|
—
|
|
— | ||||
Additional paid-in capital
|
|
147,403
|
140,195 | |||||
Retained earnings
|
|
180,701
|
109,294 | |||||
Accumulated other comprehensive income (loss)
|
|
198
|
(1,860 | ) | ||||
|
|
|
|
|||||
Total Shareholders’ Equity
|
|
328,302
|
247,629 | |||||
|
|
|
|
|||||
Total Liabilities and Shareholders’ Equity
|
$
|
449,722
|
$ | 405,261 | ||||
|
|
|
|
Common
Shares Issued |
Additional
Paid-in Capital |
Retained
Earnings |
Accum Other
Comp (Loss) Income |
Total | ||||||||||||||||
Balance at September 30, 2018
|
42,400 | $ | 129,193 | $ | 49,602 | $ | (3,377 | ) | $ | 175,418 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash dividends paid - $0.250 per share
|
— | — | (10,612 | ) | — | (10,612 | ) | |||||||||||||
Conversion of restricted share units and exercise of stock options
|
312 | 390 | — | — | 390 | |||||||||||||||
Stock compensation expense
|
— | 3,251 | — | — | 3,251 | |||||||||||||||
Net earnings
|
— | — | 24,382 | — | 24,382 | |||||||||||||||
Foreign currency translation adjustment
|
— | — | — | (802 | ) | (802 | ) | |||||||||||||
Hedging activity, net of tax
|
— | — | — | (944 | ) | (944 | ) | |||||||||||||
Adoption of ASU 2014-09
|
— | — | (116 | ) | — | (116 | ) | |||||||||||||
Adoption of ASU 2018-02
|
— | — | (148 | ) | 148 | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at September 30, 2019
|
42,712 | $ | 132,834 | $ | 63,108 | $ | (4,975 | ) | $ | 190,967 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Conversion of restricted share units and exercise of stock options
|
357 | 3,559 | — | — | 3,559 | |||||||||||||||
Stock compensation expense
|
— | 3,802 | — | — | 3,802 | |||||||||||||||
Net earnings
|
— | — | 46,186 | — | 46,186 | |||||||||||||||
Foreign currency translation adjustment
|
— | — | — | 3,884 | 3,884 | |||||||||||||||
Hedging activity, net of tax
|
— | — | — | (769 | ) | (769 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at September 30, 2020
|
43,069 | $ | 140,195 | $ | 109,294 | $ | (1,860 | ) | $ | 247,629 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Conversion of restricted share units and exercise of stock options
|
293 | 3,052 | — | — | 3,052 | |||||||||||||||
Stock compensation expense
|
— | 4,156 | — | — | 4,156 | |||||||||||||||
Net earnings
|
— | — | 71,407 | — | 71,407 | |||||||||||||||
Foreign currency translation adjustment
|
— | — | — | 1,780 | 1,780 | |||||||||||||||
Hedging activity, net of tax
|
— | — | — | 278 | 278 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at September 30, 2021
|
43,362 | $ | 147,403 | $ | 180,701 | $ | 198 | $ | 328,302 | |||||||||||
|
|
|
|
|
|
|
|
|
|
(1)
|
Summary of Significant Accounting Policies
|
(a)
|
Business Description
|
(b)
|
Principles of Consolidation and Basis of Presentation -
|
(c)
|
Use of Estimates -
|
(d)
|
Foreign Currency Translation
|
(e)
|
Cash and Cash Equivalents
|
(
f)
|
Inventories
|
(g)
|
Property, Plant and Equipment
|
(h)
|
Intangible Assets -
|
(i)
|
Revenue Recognition and Accounts Receivable
|
(j)
|
Fair Value Measurements
Fair Value Measurements and Disclosures
|
transparency and reliability of the inputs used in the valuation of such items at the measurement date based on the lowest level of input that is significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). |
(k)
|
Research and Development Costs
|
(l)
|
Income Taxes
a
x purposes. These differences are adjusted to actual upon filing of our tax returns, typically occurring in the third and fourth quarters of the current fiscal year for the preceding fiscal year’s estimates.
|
(m)
|
Stock-Based Compensation
|
(n)
|
Comprehensive Income (Loss)
unrealized gain (loss) on our current cash flow hedge,
unrecognized gain (loss) on termination of our previous cash flow hedge, and the income taxes thereon.
|
(o)
|
Shipping and Handling Costs
|
(p)
|
Non-Income Government-Assessed Taxes
|
(q)
|
Acquisitions
|
(r)
|
Other income (expense), net -
Other
income (expense), net, consists principally of transaction currency gains or losses. When a transaction is denominated in a currency other than the subsidiary’s functional currency, the Company recognizes a transaction gain or loss in other income (expense), net within the Consolidated Statements of Operations when the transaction is settled.
|
(s)
|
Recent Accounting Pronouncements
|
(2)
|
Revenue Recognition
|
Year Ended September 30,
|
2021 | 2020 | 2019 | |||||||||
Diagnostics-
|
||||||||||||
Americas
|
$ | 101,293 | $ | 97,228 | $ | 110,109 | ||||||
EMEA
|
24,475 | 21,826 | 23,888 | |||||||||
ROW
|
1,992 | 2,078 | 2,685 | |||||||||
|
|
|
|
|
|
|||||||
Total Diagnostics
|
127,760 | 121,132 | 136,682 | |||||||||
|
|
|
|
|
|
|||||||
Life Science-
|
||||||||||||
Americas
|
46,063 | 37,391 | 19,441 | |||||||||
EMEA
|
93,655 | 58,125 | 28,850 | |||||||||
ROW
|
50,418 | 37,019 | 16,041 | |||||||||
|
|
|
|
|
|
|||||||
Total Life Science
|
190,136 | 132,535 | 64,332 | |||||||||
|
|
|
|
|
|
|||||||
Consolidated
|
$ | 317,896 | $ | 253,667 | $ | 201,014 | ||||||
|
|
|
|
|
|
Year Ended September 30,
|
2021 | 2020 | 2019 | |||||||||
Diagnostics-
|
||||||||||||
Molecular assays
|
$ | 19,037 | $ | 21,907 | $ | 26,283 | ||||||
Non-molecular assays
|
108,723 | 99,225 | 110,399 | |||||||||
|
|
|
|
|
|
|||||||
Total Diagnostics
|
$ | 127,760 | $ | 121,132 | $ | 136,682 | ||||||
|
|
|
|
|
|
|||||||
Life Science-
|
||||||||||||
Molecular reagents
|
$ | 130,537 | $ | 78,431 | $ | 23,261 | ||||||
Immunological reagents
|
59,599 | 54,104 | 41,071 | |||||||||
|
|
|
|
|
|
|||||||
Total Life Science
|
$ | 190,136 | $ | 132,535 | $ | 64,332 | ||||||
|
|
|
|
|
|
Year Ended September 30,
|
2021 | 2020 | 2019 | |||||||||
Diagnostics-
|
||||||||||||
Gastrointestinal assays
|
$ | 68,890 | $ | 55,040 | $ | 68,982 | ||||||
Respiratory illness assays
|
17,608 | 26,694 | 26,622 | |||||||||
Blood chemistry assays
|
15,398 | 17,534 | 18,639 | |||||||||
Other
|
25,864 | 21,864 | 22,439 | |||||||||
|
|
|
|
|
|
|||||||
Total Diagnostics
|
$ | 127,760 | $ | 121,132 | $ | 136,682 | ||||||
|
|
|
|
|
|
(3)
|
Fair Value Measurements
|
|
|
|
|
|
Fair Value Measurements Using
Inputs Considered as |
|
||||||||||
|
|
Carrying
Value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||
Interest rate swap agreements -
|
|
|
|
|
||||||||||||
As of September 30, 2021
|
$ | (203 | ) | $ | — | $ | (203 | ) | $ | — | ||||||
As of September 30, 2020
|
$ | (713 | ) | $ | — | $ | (713 | ) | $ | — | ||||||
Contingent consideration -
|
||||||||||||||||
As of September 30, 2021
|
$ | — | $ | — | $ | — | $ | — | ||||||||
As of September 30, 2020
|
$ | (20,909 | ) | $ | — | $ | — | $ | (20,909 | ) |
(4)
|
Business Combinations
|
Year Ended September 30,
|
|
2021
|
|
|
2020
|
|
||
Net revenues
|
$ | 337,118 | $ | 279,573 | ||||
Net earnings
|
77,270 | 53,305 |
Year Ended September 30,
|
|
2021
|
|
|
2020
|
|
||
Net revenues
|
$
|
14,905
|
$ | 4,206 | ||||
Net loss
|
|
(3,381
|
)
|
(1,911 | ) |
April 30, 2020
|
||||
Fair value of assets acquired -
|
||||
Cash
|
$ | 5,006 | ||
Accounts receivable
|
637 | |||
Inventories
|
4,026 | |||
Other current assets
|
2,676 | |||
Property, plant and equipment
|
528 | |||
Goodwill
|
24,459 | |||
Other intangible assets (estimated useful life):
|
|
|||
Non-compete agreement (5 years)
|
110 | |||
Trade name (10 years)
|
3,860 | |||
Technology (15 years)
|
6,120 | |||
Customer relationships (10 years)
|
20,640 | |||
Right-of-use assets
|
1,311 | |||
Deferred tax assets, net
|
7,119 | |||
|
|
|||
76,492 | ||||
|
|
|||
Fair value of liabilities assumed -
|
||||
Accounts payable and accrued expenses (including current portion of lease and government grant obligations)
|
8,008 | |||
Long-term lease obligations
|
1,096 | |||
Long-term government grant obligations
|
10,792 | |||
Other non-current liabilities
|
291 | |||
|
|
|||
20,187 | ||||
|
|
|||
Total consideration paid (including $8,068 to pay off long-term debt)
|
$ | 56,305 | ||
|
|
Year Ended September 30,
|
2020 | 2019 | ||||||
Net revenues
|
$ | 261,131 | $ | 214,613 | ||||
Net earnings
|
|
45,843 | 19,089 | |||||
|
|
|
|
|
|
|
|
Year Ended September 30,
|
2020 | 2019 | ||||||
Adjustments to Net Revenues
|
||||||||
Exalenz pre-acquisition revenues
|
$ | 7,464 | $ | 13,599 | ||||
|
|
|
|
|||||
Adjustments to Net Earnings
|
||||||||
Exalenz pre-acquisition net losses
|
$ | (6,423 | ) | $ | (4,006 | ) | ||
Pro forma adjustments:
|
||||||||
Meridian acquisition-related costs
|
3,890 | — | ||||||
Exalenz transaction-related costs
|
4,550 | — | ||||||
Gain on Exalenz purchase price currency contracts
|
(845 | ) | — | |||||
Remove net impact of non-continuing activities
|
(305 | ) | 1,441 | |||||
Incremental depreciation and amortization
|
(1,680 | ) | (3,027 | ) | ||||
Incremental interest costs, net
|
(183 | ) | (728 | ) | ||||
Tax effects of pro forma adjustments and recognizing benefit on resulting Exalenz losses
|
653 | 1,027 | ||||||
|
|
|
|
|||||
Total Adjustments to Net Earnings
|
$ | (343 | ) | $ | (5,293 | ) | ||
|
|
|
|
(5)
|
Lead Testing Matters
|
(6)
|
Cash and Cash Equivalents
|
As of September 30,
|
2021
|
2020 | ||||||
Institutional money market funds
|
$
|
1,020
|
$ | 1,017 | ||||
Cash on hand, unrestricted
|
48,751
|
52,497 | ||||||
|
|
|
|
|||||
Total
|
$
|
49,771
|
$ | 53,514 | ||||
|
|
|
|
(7)
|
Inventories
|
As of September 30,
|
2021
|
2020 | ||||||
Raw materials
|
$
|
14,843
|
$ | 11,966 | ||||
Work-in-process
|
|
25,072
|
19,477 | |||||
Finished goods - instruments
|
|
2,260
|
1,594 | |||||
Finished goods - kits and reagents
|
|
34,667
|
28,227 | |||||
|
|
|
|
|||||
Total
|
$
|
76,842
|
$ | 61,264 | ||||
|
|
|
|
(8)
|
Goodwill and Other Intangible Assets, Net
|
2021
|
2020 | |||||||||||||||
As of September 30,
|
Gross
Carrying Value |
Accum.
Amort. |
Gross
Carrying Value |
Accum.
Amort. |
||||||||||||
Manufacturing technologies, core products and cell lines
|
$
|
62,416
|
$
|
22,633
|
$ | 62,363 | $ | 18,750 | ||||||||
Tradenames, licenses and patents
|
|
18,489
|
|
9,492
|
18,425 | 7,801 | ||||||||||
Customer lists, customer relationships and supply agreements
|
|
54,941
|
|
19,649
|
45,071 | 16,210 | ||||||||||
Non-compete agreements
|
|
110
|
|
31
|
110 | 11 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$
|
135,956
|
$
|
51,805
|
$ | 125,969 | $ | 42,772 | |||||||||
|
|
|
|
|
|
|
|
(9)
|
Leasing Arrangements
|
Year Ended September 30,
|
2021
|
2020 | ||||||
Lease costs within cost of sales
|
$
|
795
|
$ | 597 | ||||
Lease costs within operating expenses
|
1,542
|
1,286 | ||||||
Right-of-use assets, net obtained in exchange for operating lease liabilities
|
1,073
|
1,600 | ||||||
|
|
|
|
As of September 30,
|
2021
|
2020
|
||||||
Weighted average remaining lease term
|
|
3.6 yrs.
|
|
4.2 yrs. | ||||
Average discount rate
|
|
3.2
|
%
|
3.7 | % | |||
|
|
|
|
2022
|
$ | 2,194 | ||
2023
|
1,558 | |||
2024
|
1,178 | |||
2025
|
918 | |||
2026
|
326 | |||
Thereafter
|
65 | |||
|
|
|||
Total lease payments
|
6,239 | |||
Less amount of lease payment representing interest
|
(317 | ) | ||
|
|
|||
Total present value of lease payments
|
$ | 5,922 | ||
|
|
Year Ended September 30,
|
2021
|
2020 | ||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||||||
Operating cash flows from operating leases
|
$
|
2,228
|
$ | 1,693 | ||||
|
|
|
|
(10)
|
Bank Credit Arrangements
|
(11)
|
Income Taxes
|
(a) |
Earnings before income taxes, and the related income tax provision were as follows:
|
Year Ended September 30,
|
2021
|
2020 | 2019 | |||||||||
Domestic
|
$
|
11,354
|
$ | 9,068 | $ | 23,954 | ||||||
Foreign
|
|
79,097
|
50,225 | 7,603 | ||||||||
|
|
|
|
|
|
|||||||
Total earnings before income taxes
|
$
|
90,451
|
$ | 59,293 | $ | 31,557 | ||||||
|
|
|
|
|
|
|||||||
Provision
(benefit)
for income taxes -
|
||||||||||||
Federal -
|
||||||||||||
Current
|
$
|
4,431
|
|
$ | 1,173 | $ | 5,001 | |||||
Deferred
|
|
(2,595
|
)
|
744 | (477 | ) | ||||||
State and local
|
|
1,163
|
1,170 | 834 | ||||||||
Foreign -
|
||||||||||||
Current
|
|
16,305
|
10,194 | 1,915 | ||||||||
Deferred
|
|
(260
|
)
|
(174 | ) | (98 | ) | |||||
|
|
|
|
|
|
|||||||
Total income tax provision
|
$
|
19,044
|
$ | 13,107 | $ | 7,175 | ||||||
|
|
|
|
|
|
(b) |
The following is a reconciliation between the statutory U.S. income tax rate and the effective rate derived by dividing the income tax provision by earnings before income taxes:
|
Year Ended September 30,
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|||||||||||||||
Computed income taxes at statutory rate
|
$
|
18,995
|
|
21.0
|
%
|
$ | 12,452 | 21.0 | % | $ | 6,627 | 21.0 | % | |||||||||||
Increase (decrease) in taxes resulting from -
|
||||||||||||||||||||||||
State and local income taxes
|
|
1,204
|
|
1.3
|
773 | 1.3 | 577 | 1.8 | ||||||||||||||||
Foreign-Derived Intangible Income tax
|
|
(563
|
)
|
|
(0.6
|
)
|
(136 | ) | (0.2 | ) | (294 | ) | (0.9 | ) | ||||||||||
Global Intangible Low Taxed Income
(“GILTI”)
tax
|
|
8,061
|
|
8.9
|
4,970 | 8.4 | 1,119 | 3.5 | ||||||||||||||||
Foreign tax credit
|
|
(7,802
|
)
|
|
(8.6
|
)
|
(4,767 | ) | (8.0 | ) | (990 | ) | (3.1 | ) | ||||||||||
Foreign tax rate differences
|
|
(869
|
)
|
|
(1.0
|
)
|
(534 | ) | (0.9 | ) | 46 | 0.1 | ||||||||||||
Transaction costs
|
|
—
|
|
|
—
|
|
548 | 0.9 | — | — | ||||||||||||||
Uncertain tax position activity
|
|
205
|
|
0.2
|
62 | 0.1 | 126 | 0.4 | ||||||||||||||||
Valuation allowance
|
|
729
|
|
|
0.8
|
|
229 | 0.3 | 364 | 1.2 | ||||||||||||||
Stock-based compensation
|
|
(498
|
)
|
|
(0.5
|
)
|
41 | 0.1 | (33 | ) | (0.1 | ) | ||||||||||||
Other, net
|
|
(418
|
)
|
|
(0.4
|
)
|
(531 | ) | (0.9 | ) | (367 | ) | (1.2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
$
|
19,044
|
|
21.1
|
%
|
$ | 13,107 | 22.1 | % | $ | 7,175 | 22.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended September 30,
|
2021
|
2020 | 2019 | |||||||||
U.S. GILTI inclusion
|
$
|
38,384
|
$ | 23,666 | $ | 5,328 | ||||||
Resulting permanent tax expense
|
8,061
|
4,970 | 1,119 | |||||||||
Offsetting foreign tax credit
|
(7,802
|
)
|
(4,767 | ) | (990 | ) | ||||||
|
|
|
|
|
|
(c) |
The components of net deferred taxes were as follows:
|
As of September 30,
|
2021
|
2020 | ||||||
Deferred tax assets -
|
||||||||
Valuation reserves and non-deductible expenses
|
$
|
4,939
|
$ | 4,848 | ||||
Stock compensation expense not deductible
|
|
2,276
|
1,804 | |||||
Net operating loss and tax credit carryforwards
|
|
12,711
|
10,757 | |||||
Basis difference in equity-method investee
|
|
302
|
302 | |||||
Inventories basis differences
|
|
692
|
382 | |||||
Other
|
|
—
|
|
207 | ||||
|
|
|
|
|||||
Subtotal
|
|
20,920
|
18,300 | |||||
Less valuation allowance
|
|
(1,624
|
)
|
(895 | ) | |||
|
|
|
|
|||||
Deferred tax assets
|
|
19,296
|
17,405 | |||||
|
|
|
|
|||||
Deferred tax liabilities -
|
||||||||
Property, plant and equipment basis differences and depreciation
|
|
(4,778
|
)
|
(4,269 | ) | |||
Intangible asset basis differences and amortization
|
|
(6,495
|
)
|
(9,293 | ) | |||
Other
|
|
(347
|
)
|
— | ||||
|
|
|
|
|||||
Deferred tax liabilities
|
|
(11,620
|
)
|
(13,562 | ) | |||
|
|
|
|
|||||
Net deferred tax assets
|
$
|
7,676
|
$ | 3,843 | ||||
|
|
|
|
Year Ended September 30,
|
2021
|
2020
|
2019
|
|||||||||
Unrecognized income tax benefits at beginning of year
|
$
|
568
|
$ | 509 | $ | 388 | ||||||
Additions for tax positions of prior years
|
|
34
|
— | 83 | ||||||||
Reductions for tax positions of prior years
|
|
—
|
|
— | (38 | ) | ||||||
Additions for tax positions of current year
|
|
138
|
104 | 138 | ||||||||
Tax examination and other settlements
|
|
(40
|
)
|
(45 | ) | (62 | ) | |||||
|
|
|
|
|
|
|||||||
Unrecognized income tax benefits at end of year
|
$
|
700
|
$ | 568 | $ | 509 | ||||||
|
|
|
|
|
|
(12)
|
Employee Benefits
|
(a)
|
Savings and Investment Plan
-
We have a profit sharing and retirement savings plan covering substantially all full-time U.S. employees. Profit sharing contributions to the plan, which are discretionary, are approved by the board of directors. The plan permits participants to contribute to the plan through salary reduction. Under terms of the plan, we match 100% of an employee’s contributions, up to a maximum match of 4% of eligible compensation. Our discretionary and matching contributions to the plan, which
are
recorded primarily within operating expenses, amounted to approximately $2,869, $2,434 and $1,979, for the years ended September 30, 2021, 2020 and 2019, respectively.
|
(b)
|
Stock-Based Compensation Plans
-
During fiscal 2021, the Company had two active stock-based compensation plans, the 2012 Stock Incentive Plan, which became effective January 25, 2012 (the “2012 Plan”) and the 2021 Omnibus Award Plan, which became effective January 27, 2021 (the “2021 Plan”).
|
Year ended September 30,
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|||
Share price volatility
|
|
53%-59%
|
|
34 | % | 29 | % | |||||
Life of option
|
|
4.00-7.47 yrs.
|
|
6.51 yrs
.
|
6.51 yrs
.
|
|||||||
Risk-free interest rates
|
|
0.26%
-
0.79%
|
|
1.60 | % | 2.99 | % | |||||
Dividend yield
|
|
0
%
|
|
0 | % | 3.3 | % |
|
|
Options
|
|
|
Wtd Avg
Exercise Price |
|
|
Wtd Avg
Remaining Life (Yrs) |
|
|
Aggregate
Intrinsic Value |
|
||||
Outstanding beginning of period
|
1,103 | $ | 14.67 | |||||||||||||
Grants
|
167 | 19.28 | ||||||||||||||
Exercises
|
(219 | ) | 14.48 | |||||||||||||
Forfeitures
|
(19 | ) | 11.46 | |||||||||||||
Cancellations
|
(31 | ) | 21.85 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding end of period
|
1,001 | $ | 15.31 | 6.55 | $ | 4,299 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable end of period
|
598 | $ | 15.90 | 5.44 | $ | 2,276 | ||||||||||
|
|
|
|
|
|
|
|
Options |
Weighted-
Average Grant Date Fair Value |
|||||||
Nonvested beginning of period
|
429 | $ | 3.36 | |||||
Granted
|
167 | 9.18 | ||||||
Vested
|
(174 | ) | 3.59 | |||||
Forfeitures
|
(19 | ) | 2.83 | |||||
|
|
|
|
|||||
Nonvested end of period
|
403 | $ | 5.70 | |||||
|
|
|
|
(13)
|
Contingent Obligations and Non-Current Liabilities
|
Year Ended September 30,
|
2021
|
2020 | ||||||
Current liabilities
|
$
|
638
|
$ | 600 | ||||
Non-current liabilities
|
5,176
|
10,524 |
(14)
|
National Institutes of Health Contracts
|
(15)
|
Reportable Segments and Major Concentration Data
|
|
|
Diagnostics
|
|
|
Life Science
|
|
|
Corporate
(1) |
|
|
Eliminations
(2) |
|
|
Total
|
|
|||||
Fiscal 2021
|
|
|||||||||||||||||||
Net revenues -
|
|
|
|
|
|
|||||||||||||||
Third-party
|
|
$
|
127,760
|
|
$
|
190,136
|
|
$
|
—
|
|
$
|
—
|
|
$
|
317,896
|
|||||
Inter-segment
|
|
|
351
|
|
|
207
|
|
|
—
|
|
|
(558
|
)
|
|
|
—
|
||||
Operating (loss) income
|
|
|
(8,140
|
)
|
|
|
115,250
|
|
|
(14,164
|
)
|
|
|
88
|
|
|
|
93,034
|
||
Depreciation and amortization
|
|
|
13,432
|
|
|
1,854
|
|
|
—
|
|
|
—
|
|
|
15,286
|
|||||
Capital expenditures
|
|
|
15,827
|
|
|
2,485
|
|
|
—
|
|
|
—
|
|
|
18,312
|
|||||
Goodwill
|
|
|
94,904
|
|
|
19,764
|
|
|
—
|
|
|
—
|
|
|
114,668
|
|||||
Other intangible assets, net
|
|
|
84,149
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
84,151
|
|||||
Total assets
|
|
|
339,208
|
|
|
110,536
|
|
|
—
|
|
|
(22
|
)
|
|
|
449,722
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2020
|
|
|
|
|
|
|||||||||||||||
Net revenues -
|
|
|
|
|
|
|||||||||||||||
Third-party
|
|
$
|
121,132
|
|
$
|
132,535
|
|
$
|
—
|
|
$
|
—
|
|
$
|
253,667
|
|||||
Inter-segment
|
|
|
326
|
|
|
261
|
|
|
—
|
|
|
(587
|
)
|
|
|
—
|
||||
Operating (loss) income
|
|
|
3,885
|
|
|
68,826
|
|
|
(11,437
|
)
|
|
|
50
|
|
|
|
61,324
|
|||
Depreciation and amortization
|
|
|
11,451
|
|
|
2,116
|
|
|
—
|
|
|
—
|
|
|
13,567
|
|||||
Capital expenditures
|
|
|
1,850
|
|
|
1,449
|
|
|
—
|
|
|
—
|
|
|
3,299
|
|||||
Goodwill
|
|
|
94,855
|
|
|
19,331
|
|
|
—
|
|
|
—
|
|
|
114,186
|
|||||
Other intangible assets, net
|
|
|
83,179
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
83,197
|
|||||
Total assets
|
|
|
306,812
|
|
|
98,483
|
|
|
—
|
|
|
(34
|
)
|
|
|
405,261
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2019
|
|
|
|
|
|
|||||||||||||||
Net revenues -
|
|
|
|
|
|
|||||||||||||||
Third-party
|
|
$
|
136,682
|
|
$
|
64,332
|
|
$
|
—
|
|
$
|
—
|
|
$
|
201,014
|
|||||
Inter-segment
|
|
|
462
|
|
|
361
|
|
|
—
|
|
|
(823
|
)
|
|
|
—
|
||||
Operating (loss) income
|
|
|
25,390
|
|
|
17,581
|
|
|
(10,373
|
)
|
|
|
101
|
|
|
32,699
|
||||
Depreciation and amortization
|
|
|
7,676
|
|
|
2,288
|
|
|
—
|
|
|
—
|
|
|
9,964
|
|||||
Capital expenditures
|
|
|
2,049
|
|
|
1,748
|
|
|
—
|
|
|
—
|
|
|
3,797
|
|||||
Goodwill
|
|
|
70,395
|
|
|
18,846
|
|
|
—
|
|
|
—
|
|
|
89,241
|
|||||
Other intangible assets, net
|
|
|
59,807
|
|
|
436
|
|
|
—
|
|
|
—
|
|
|
60,243
|
|||||
Total assets
|
|
|
255,169
|
|
|
70,392
|
|
|
—
|
|
|
(83
|
)
|
|
|
325,478
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes Restructuring and Selected Legal Costs of $2,803, $2,080 and $2,596 for the years ended September 30, 2021, 2020 and 2019, respectively.
|
(2)
|
Eliminations consist of inter-segment transactions.
|
Year Ended September 30,
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|||
Operating (loss) income:
|
|
|
|
|||||||||
Diagnostics segment
|
|
$
|
(8,140
|
)
|
|
$
|
3,885
|
|
$
|
25,390
|
||
Life Science segment
|
|
|
115,250
|
|
|
68,826
|
|
|
17,581
|
|||
Eliminations
|
|
|
88
|
|
|
50
|
|
|
101
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Total reportable segment operating income
|
|
|
107,198
|
|
|
72,761
|
|
|
43,072
|
|||
Corporate operating expenses
|
|
|
(14,164
|
)
|
|
|
(11,437
|
)
|
|
|
(10,373
|
)
|
Interest income
|
|
|
—
|
|
|
142
|
|
|
681
|
|||
Interest expense
|
|
|
(1,878
|
)
|
|
|
(2,632
|
)
|
|
|
(1,945
|
)
|
RADx initiative grant income
|
|
|
1,000
|
|
|
—
|
|
|
—
|
|||
Other, net
|
|
|
(1,705
|
)
|
|
|
459
|
|
|
122
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated earnings before income taxes
|
|
$
|
90,451
|
|
$
|
59,293
|
|
$
|
31,557
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended September 30,
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|||
Diagnostics
|
|
|
|
|||||||||
Customer A
|
10 |
%
|
12 | % | 13 | % | ||||||
Customer B
|
11 |
%
|
13 | % | 12 | % | ||||||
Customer C
|
12 |
%
|
7 | % | 6 | % | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Science
|
|
|
||||||||||
Customer D
|
6 |
%
|
6 | % | 18 | % | ||||||
Customer E
|
3 |
%
|
13 | % | 7 | % | ||||||
Customer F
|
13 |
%
|
11 | % | 2 | % |
Year Ended September 30,
|
2021
|
2020 | 2019 | |||||||||
U.S. and territories
|
$
|
99,636
|
$ | 95,382 | $ | 107,890 | ||||||
Italy
|
|
12,240
|
9,797 | 10,911 | ||||||||
France
|
|
2,283
|
2,238 | 2,446 | ||||||||
United Kingdom
|
|
2,197
|
2,312 | 2,396 | ||||||||
Belgium
|
|
1,554
|
1,440 | 1,468 | ||||||||
Holland
|
|
1,279
|
1,183 | 1,413 | ||||||||
Finland
|
|
1,069
|
275 | 291 | ||||||||
Japan
|
|
551
|
848 | 1,572 | ||||||||
Other countries
|
|
6,951
|
7,657 | 8,295 | ||||||||
|
|
|
|
|
|
|||||||
Total Diagnostics
|
$
|
127,760
|
$ | 121,132 | $ | 136,682 | ||||||
|
|
|
|
|
|
Year Ended September 30,
|
2021
|
2020 | 2019 | |||||||||
U.S. and territories
|
$
|
44,785
|
$ | 36,689 | $ | 18,931 | ||||||
Germany
|
|
18,460
|
14,190 | 12,663 | ||||||||
Finland
|
|
17,936
|
2,518 | 500 | ||||||||
China
|
|
13,559
|
19,047 | 8,464 | ||||||||
United Kingdom
|
|
13,097
|
14,765 | 4,709 | ||||||||
Spain
|
|
12,593
|
7,242 | 4,414 | ||||||||
France
|
|
10,733
|
5,579 | 2,200 | ||||||||
South Korea
|
|
9,242
|
1,908 | 1,134 | ||||||||
Australia
|
|
9,115
|
5,957 | 3,458 | ||||||||
Italy
|
|
7,516
|
4,067 | 1,357 | ||||||||
Turkey
|
|
7,281
|
2,819 | 290 | ||||||||
Japan
|
|
6,532
|
3,707 | 1,624 | ||||||||
India
|
|
5,558
|
2,099 | 143 | ||||||||
Indonesia
|
|
5,183
|
3,027 | 169 | ||||||||
Holland
|
|
3,197
|
3,212 | 710 | ||||||||
Canada
|
|
1,073
|
547 | 322 | ||||||||
Other countries
|
|
4,276
|
5,162 | 3,244 | ||||||||
|
|
|
|
|
|
|||||||
Total Life Science
|
$
|
190,136
|
$ | 132,535 | $ | 64,332 | ||||||
|
|
|
|
|
|
As of September 30,
|
2021
|
2020 | ||||||
Israel
|
$
|
80,416
|
$ | 70,097 | ||||
United Kingdom
|
|
30,027
|
27,373 | |||||
Germany
|
|
22,293
|
12,877 | |||||
Canada
|
|
15,236
|
9,865 | |||||
Italy
|
|
6,921
|
7,858 |
(16)
|
Commitments and Contingent Obligations
|
(a)
|
Royalty Commitments
-
of such expense relating to our Diagnostics and Life Science segments, respectively. These royalty expenses are recognized as the related revenues are earned and are recorded as a component of cost of sales. Annual royalty expenses associated with these agreements totaled approximately
$1,900 and $2,100 for the years ended September 30, 2020 and 2019, respectively
, with approximately 80% and 85%, respectively, of such expense relating to the Diagnostics segment.
|
(b)
|
Purchase Commitments
-
Excluding the operating lease commitments reflected in Note 9, w
e
have purchase commitments primarily for inventories and service items as part of the normal course of business. Commitments made under these obligations are $49,537 for fiscal 2022 and $1,758 for fiscal 2023 through fiscal 202
6
. No purchase commitments have been made beyond fiscal 202
6
.
|
(c)
|
Litigation
-
We are a party to various litigation matters from time to time that we believe are in the normal course of business. The ultimate resolution of these routine matters is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows. Additionally, the Company has also become a party to certain legal matters that are somewhat outside the normal course of business. See Note 5 for a discussion of Magellan’s DOJ matter.
|
(d)
|
Indemnifications
-
In conjunction with certain contracts and agreements, we provide routine indemnifications related to our performance obligations. The terms of these indemnifications range in duration and in some circumstances are not explicitly defined. The maximum obligation under some such indemnifications is not explicitly stated and, as a result of our having no history of paying such indemnifications, cannot be reasonably estimated. We have not made any payments for these indemnifications and no liability is recorded at September 30, 2021 or 2020.
|
(17)
|
Subsequent Events
|
(a)
|
(1) and (2) FINANCIAL STATEMENTS AND SCHEDULES.
|
(b)
|
(3) EXHIBITS.
|
Exhibit
Number |
|
Description of Exhibit
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
10.1*
|
|
32**
|
|
|
101.INS***
|
|
Inline XBRL Instance Document
|
101.SCH***
|
|
Inline XBRL Taxonomy Extension Schema
|
101.CAL***
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF***
|
|
Inline XBRL Taxonomy Extension Definition Linkbase
|
101.LAB***
|
|
Inline XBRL Taxonomy Extension Label Linkbase
|
101.PRE***
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase
|
104***
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
*
|
Management Compensatory Contracts
|
**
|
Furnished, not filed
|
***
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.
|
†
|
Schedules to and certain portions of these exhibits 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 schedule or other portion to the SEC upon request.
|
MERIDIAN BIOSCIENCE, INC.
|
||
By:
|
|
/s/ Jack Kenny
|
Date: November 23, 2021
|
||
Jack Kenny
|
||
Chief Executive Officer
|
Signature
|
|
Capacity
|
|
Date
|
/s/ Jack Kenny
|
|
Chief Executive Officer and Director
|
|
November 23, 2021
|
Jack Kenny
|
|
|
||
/s/ Bryan T. Baldasare
|
|
Executive Vice President, Chief
|
|
November 23, 2021
|
Bryan T. Baldasare
|
|
Financial Officer and Secretary
(Principal Financial and Accounting Officer)
|
|
|
/s/ David C. Phillips
|
|
Chairman of the Board
|
|
November 23, 2021
|
David C. Phillips
|
|
|
||
/s/ James M. Anderson
|
|
Director
|
|
November 23, 2021
|
James M. Anderson
|
|
|
||
/s/ Anthony P. Bihl III
|
|
Director
|
|
November 23, 2021
|
Anthony P. Bihl III
|
|
|
||
/s/ Dwight E. Ellingwood
|
|
Director
|
|
November 23, 2021
|
Dwight E. Ellingwood
|
|
|
||
/s/ John C. McIlwraith
|
|
Director
|
|
November 23, 2021
|
John C. McIlwraith
|
|
|
||
/s/ John M. Rice, Jr.
|
|
Director
|
|
November 23, 2021
|
John M. Rice, Jr.
|
|
|
||
/s/ Catherine A. Sazdanoff
|
|
Director
|
|
November 23, 2021
|
Catherine A. Sazdanoff
|
|
|
||
/s/ Felicia Williams
|
|
Director
|
|
November 23, 2021
|
Felicia Williams
|
|
|
Description
|
Balance at
Beginning of Period |
Charged to
Costs and Expenses |
Deductions | Other (a) |
Balance at
End of Period |
|||||||||||||||
Year Ended September 30, 2021:
|
||||||||||||||||||||
Allowance for doubtful accounts
|
$ | 513 | $ | 583 | $ | (34 | ) | $ | 16 | $ | 1,078 | |||||||||
Inventory realizability reserves
|
3,629 | 2,703 | (1,297 | ) | (38 | ) | 4,997 | |||||||||||||
Valuation allowances – deferred taxes
|
895 |
729
|
— | — | 1,624 | |||||||||||||||
Year Ended September 30, 2020:
|
||||||||||||||||||||
Allowance for doubtful accounts
|
$ | 537 | $ | 34 | $ | (75 | ) | $ | 17 | $ | 513 | |||||||||
Inventory realizability reserves
|
2,441 | 1,775 | (564 | ) | (23 | ) | 3,629 | |||||||||||||
Valuation allowances – deferred taxes
|
666 |
335
|
(106 | ) | — | 895 | ||||||||||||||
Year Ended September 30, 2019:
|
||||||||||||||||||||
Allowance for doubtful accounts
|
$ | 310 | $ | 347 | $ | (100 | ) | $ | (20 | ) | $ | 537 | ||||||||
Inventory realizability reserves
|
1,971 | 930 | (448 | ) | (12 | ) | 2,441 | |||||||||||||
Valuation allowances – deferred taxes
|
302 | 364 | — | — | 666 |
(a)
|
Balances reflect the effects of currency translation.
|
Exhibit 10.7
MERIDIAN BIOSCIENCE, INC.
2021 OMNIBUS AWARD PLAN
RESTRICTED SHARE UNIT AWARD AGREEMENT
TIME-BASED (U.S. EMPLOYEES)
Summary of Restricted Share Unit Award Grant
Meridian Bioscience, Inc., an Ohio corporation (the Company), grants to the Grantee named below, in accordance with the terms of the Meridian Bioscience, Inc. 2021 Omnibus Award Plan (the Plan) and this Restricted Share Unit Award Agreement (the Agreement), the following number of Restricted Share Units of the Company (the Restricted Units), on the Grant Date set forth below:
|
Name of Grantee: |
|||||
Number of Units: |
||||||
Grant Date: |
November 4, 2021 | |||||
Vesting Date: |
25% November 4, 2022
25% November 4, 2023 25% November 4, 2024 25% November 4, 2025 |
Terms of Agreement
1. Grant of Restricted Share Unit Awards. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and in the Plan, the Company hereby grants to the Grantee as of the Grant Date, the total number of Restricted Units set forth above. The Restricted Units shall be credited in a book entry account established for the Grantee until payment in accordance with Section 4 hereof.
2. Vesting of Restricted Units.
(a) Except as otherwise provided in this Agreement, this grant of Restricted Units shall vest in full on the Vesting Date above. Prior to the Vesting Date, no portion of the award is vested, except as otherwise provided in Section 2.
(b) All of the Restricted Units shall vest in full prior to the Vesting Date upon the occurrence of any of the following: (i) the Grantee dies while in the employ of the Company; (ii) the Grantee satisfies the requirements for Retirement, including separation from employment with the Company; or (iii) the Grantee has a Disability.
(c) The Committee may, in its sole discretion, accelerate the time at which the Restricted Units become vested and non-forfeitable to a time other than the Vesting Date as provided in
Section 2(a) or to a time other than provided in Section (2)(b)(i), (ii), or (iii) on such terms and conditions as it deems appropriate in accordance with the terms and conditions of the Plan, provided such acceleration does not result in an impermissible acceleration of payments under Section 409A of the Code.
(d) The extent to which the Restricted Units may vest upon a Change in Control is described on Appendix A attached hereto.
3. Forfeiture of Restricted Units.
(a) The Restricted Units that have not yet vested pursuant to Section 2 shall be forfeited automatically without further action or notice if the Grantee ceases to be employed by the Company other than as provided in Section 2 hereof.
(b) The Grantee hereby acknowledges that in order for the Restricted Units to vest, Grantee must, prior to the first Vesting Date identified on the first page hereof under Summary of Restricted Share Unit Award Grant, (i) accept the Restricted Units online or by telephone in accordance with the procedures established by the Company and Merrill Lynch, and; (ii) open a Merrill Lynch brokerage account through the system maintained on behalf of the Company. If the Grantee has not completed both of the tasks prior to the first Vesting Date identified on the first page hereof under Summary of Restricted Share Unit Award Grant, the Restricted Units shall be forfeited as of such date.
(c) In addition, in 2020 the Board adopted a compensation recoupment or clawback policy (the Clawback Policy) applicable to all Company officers subject to Section 16 of the Exchange Act.
4. Payment.
(a) Except as otherwise provided in this Agreement, the Company shall deliver to the Grantee one share of its common stock (Share) for each vested Restricted Unit within thirty (30) days following the earlier of:
(i) |
the Vesting Date identified on the first page hereof under Summary of Restricted Share Unit Award Grant; |
(ii) |
the date of the Grantees death; |
(iii) |
the date of the Grantees Disability, provided such Disability also constitutes a disability within the meaning of Section 409A of the Code with respect to a Grantee whose Restricted Units are subject to Section 409A of the Code; or |
(iv) |
the date of Grantees termination of employment with the Company as a result of Retirement, provided such termination of employment also constitutes a separation from service within the meaning of Section 409A of the Code with respect to a Grantee whose Restricted Units are subject to Section 409A of the Code. |
- 2 -
If the Grantee is a specified employee within the meaning of Section 409A of the Code on the date of the Grantees separation from service and the Grantees Restricted Units are subject to Section 409A of the Code, then payment under (iv) above shall be made on the first day of the seventh month following the Grantees separation from service, or, if earlier, the date of the Grantees death.
(b) The Companys obligations with respect to the Restricted Units shall be satisfied in full upon the delivery of its Shares pursuant to Section 4(a) herein.
5. Transferability. The Restricted Units may not be transferred and shall not be subject in any manner to assignment, alienation, pledge, encumbrance or charge, until all restrictions are removed or have expired, unless otherwise provided under the Plan. Any purported Transfer or encumbrance in violation of the provisions of this Section 5 shall be void, and the other party to any such purported transaction shall not obtain any rights to or interest in such Restricted Units.
6. Voting and Other Rights. The Grantee will not have any rights of a shareholder of the Company with respect to the Restricted Units until the delivery of the underlying Shares. The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.
7. Dividend Equivalent Payment Rights. The Grantee shall possess no dividend equivalent payment rights with respect to the Restricted Units granted pursuant to this Agreement as of the Grant Date.
8. Continuous Employment. Unless otherwise specified by the Plan, for purposes of this Agreement, the continuous employment of the Grantee with the Company shall not be deemed to have been interrupted, and the Grantee shall not be deemed to have ceased to be an employee of the Company, by reason of the transfer of his employment among the Company or a leave of absence approved by the Committee.
9. No Employment Contract. Nothing contained in this Agreement shall confer upon the Grantee any right with respect to continuance of employment by the Company, nor limit or affect in any manner the right of the Company to terminate the employment or adjust the compensation of the Grantee.
10. Relation to Other Benefits. Any economic or other benefit to the Grantee under this Agreement or the Plan shall not be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company and shall not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company.
11. Taxes and Withholding. To the extent that the Company is required to withhold any federal, state, local, foreign or other tax in connection with the Restricted Units pursuant to this Agreement, it shall be a condition to earning the award that the Grantee make arrangements satisfactory to the Company for payment of such taxes required to be withheld. With respect to payments under Section 4 herein, the Committee may, in its sole discretion, require the Grantee to satisfy such required withholding obligation by surrendering to the Company a portion of the Shares earned by the Grantee hereunder, and the Shares so surrendered by the Grantee shall be credited
- 3 -
against any such withholding obligation at the Fair Market Value of such Shares on the date of surrender. Further, the Committee may accelerate the payment of a portion of the Shares earned by the Grantee hereunder to pay the Federal Insurance Contributions Act (FICA) tax under Sections 3101, 3121(a) and 3121(v)(2) of the Code and the corresponding income tax withholding related to the FICA amount.
12. Adjustments. The number and kind of Shares deliverable pursuant to a Restricted Unit are subject to adjustment as provided in Section 12 of the Plan.
13. Compliance with Law. While the Company shall make reasonable efforts to comply with all applicable federal and state securities laws and listing requirements with respect to the Restricted Units or Shares that may be delivered pursuant to Section 4 herein, the Company shall not be obligated to deliver any Restricted Units or Shares pursuant to this Agreement if the delivery thereof would result in a violation of any such law or listing requirement.
14. Amendments. Subject to the terms of the Plan, the Committee may modify this Agreement upon written notice to the Grantee. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, no amendment of the Plan or this Agreement shall adversely affect the rights of the Grantee under this Agreement without the Grantees consent unless the Committee determines, in good faith, that such amendment is required for the Agreement to either be exempt from the application of, or comply with, the requirements of Section 409A of the Code, or as otherwise may be provided in the Plan.
15. Section 409A of the Code. It is intended that the Restricted Units shall be exempt from the application of, or comply with, the requirements of Section 409A of the Code. The terms of this Agreement shall be construed, administered, and governed in a manner that effects such intent, and the Committee shall not take any action that would be inconsistent with such intent. Without limiting the foregoing, the Restricted Units shall not be deferred, accelerated, extended, paid out, settled, adjusted, substituted, exchanged or modified in a manner that would cause the award to fail to satisfy the conditions of an applicable exception from the requirements of Section 409A of the Code or otherwise would subject the Grantee to the additional tax imposed under Section 409A of the Code.
16. Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.
17. Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. This Agreement and the Plan contain the entire agreement and understanding of the parties with respect to the subject matter contained in this Agreement, and supersede all prior written or oral communications, representations and negotiations in respect thereto. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern except with respect to Section 2(a) of this Agreement. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the grant of the Restricted Units.
- 4 -
18. Successors and Assigns. Without limiting Section 5, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.
19. No Advice Regarding Award. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Grantees participation in the Plan or the acquisition or sale of the underlying securities. The Grantee is hereby advised to consult with the Grantees personal tax, legal or financial advisors regarding the decision to participate in the Plan before taking any action related to the Plan.
20. Governing Law.
(a) The interpretation, performance, and enforcement of this Agreement, including tort claims, shall be governed by the laws of the State of Ohio, without giving effect to the principles of conflict of laws thereof.
(b) Any party bringing a legal action or proceeding against another party arising out of or relating to this Agreement may bring the legal action or proceeding only in the United States District Court for the Southern District of Ohio and any of the courts of the State of Ohio, in each case sitting in Cincinnati, Ohio.
(c) Each of the Company and the Grantee waives, to the fullest extent permitted by law, (i) any objection which it may now or later have to the laying of venue of any legal action or proceeding arising out of or relating to this Agreement brought in any court of the State of Ohio sitting in Cincinnati, Ohio or the United States District Court for the Southern District of Ohio sitting in Cincinnati, Ohio, including, without limitation, a motion to dismiss on the grounds of forum non conveniens or lack of subject matter jurisdiction; and (ii) any claim that any action or proceeding brought in any such court has been brought in an inconvenient forum.
(d) Each of the Company and the Grantee submits to the exclusive jurisdiction (both personal and subject matter) of (i) the United States District Court for the Southern District of Ohio sitting in Cincinnati, Ohio and its appellate courts, and (ii) any court of the State of Ohio sitting in Cincinnati, Ohio and its appellate courts, for the purposes of all legal actions and proceedings arising out of or related to this Agreement.
21. Language. If the Grantee receives this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
22. Electronic Delivery. The Grantee hereby consents and agrees to electronic delivery of any documents that the Company may elect to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other forms of communications) in connection with this and any other award made or offered under the Plan. The Grantee understands that, unless earlier revoked by the Grantee by giving written notice to the Secretary of the Company, this consent shall be effective for the duration of the Agreement. The Grantee also understands that he or she shall have the right at any time to request that the Company deliver written copies of any and all materials referred to above at no charge. The Grantee hereby consents to any and all procedures the Company has established or may establish for an electronic signature system for delivery and acceptance of any such documents that the Company may
- 5 -
elect to deliver, and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature. The Grantee consents and agrees that any such procedures and delivery may be effected by a third party engaged by the Company to provide administrative services related to the Plan.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officer and the Grantee has also executed this Agreement, as of the Grant Date.
MERIDIAN BIOSCIENCE, INC. |
||
By: | ||
Name: Bryan T. Baldasare | ||
Title: Chief Financial Officer |
You must accept the award online or by telephone in accordance with the procedures established by the Company and the Plan administrator. By accepting your award in accordance with these procedures, you acknowledge that a copy of the Plan, Plan Summary and Prospectus, and the Companys most recent Annual Report and Proxy Statement (the Prospectus Information) either have been received by you or are available for viewing on the Companys intranet site or internet site at www.meridianbioscience.com, and consent to receiving this Prospectus Information electronically, or, in the alternative, agree to contact Julie Smith at (513) 272-5230 to request a paper copy of the Prospectus Information at no charge. You also represent that you are familiar with the terms and provisions of the Prospectus Information and hereby accept the award on the terms and conditions set forth herein and in the Plan. These terms and conditions constitute a legal contract that will bind both you and the Company as soon as you accept the award as described above.
- 6 -
APPENDIX A
Notwithstanding anything to the contrary in Section 2, in the event of a Change in Control, unless the successor company, or a parent of the successor company in the Change in Control agrees to assume, replace, or substitute the Restricted Units granted hereunder (as of the consummation of such Change in Control) with Restricted Units on substantially identical terms, as determined by the Committee, if the Grantees employment with the Company or its Affiliates (or any successor thereto) is terminated within twenty-four(24) months following a Change in Control either (x) by the Company or its Affiliates (or any successor thereto) without Cause (as defined in the Plan) or (y) by the Grantee with Good Reason, the Restricted Units granted hereunder shall become vested in their entirety as of the date of such termination and payment shall be made within thirty days following vesting. As used herein, Good Reason shall mean the occurrence of any of the following: (i) a material diminution in the Grantees authority, duties or responsibilities; (ii) a material diminution in the Grantees annual base salary as in effect on the date of this Agreement or as the same may be increased from time to time; (iii) the Company fails to pay or provide any amount or benefit that the Company is obligated to pay or provide under this Agreement or any other employment, compensation, benefit or reimbursement plan, agreement or arrangement of the Company to which the Grantee is a party or in which the Grantee participates; (iv) the relocation of the Grantees principal place of employment to a location which increases the Grantees one-way commuting distance by more than 50 miles, or the Companys requiring the Grantee to travel on business other than to an extent substantially consistent with the Grantees business travel obligations prior to the Change in Control; (v) a significant adverse change occurs, whether of a quantitative or qualitative nature, in the indemnification protection provided to the Grantee for acts and omissions arising out of his service on behalf of the Company or any other entity at the request of the Company; or (vi) the Company fails to obtain the assumption of this Agreement.
- 7 -
APPENDIX B
Internal Revenue Code Section 409A
These Restricted Units are designed to be exempt from, or comply with, the provisions of Internal Revenue Code Section 409A. If the Restricted Units are subject to Section 409A, there may be limitations with respect to the timing of the delivery of shares in certain situations (Retirement, Disability, Change in Control along with an involuntary termination of employment) as noted above in Section 4. Payment. In addition, if Section 409A applies, there is a six month waiting period before the shares can be delivered to certain high level employees on account of Retirement or a Change in Control along with an involuntary termination of employment.
Key terms related to this section of the Code are defined below.
Separation from Service
In general, a separation from service occurs when there is no longer any employment or consulting relationship between the employee and Meridian.
Specified Employee
In simplified terms, this includes employees who are Officers of Meridian Bioscience, Inc. and have annual compensation of greater than $185,000 (as adjusted from time to time). Additionally, this includes employees who own more than 1% of the Company and have annual compensation of greater than $150,000.
This discussion of Section 409A and certain key terms is only a summary and is not a part of the Agreement or the Plan. If you have any questions regarding these provisions please contact Bryan Baldasare.
10540839.6
- 8 -
Exhibit 10.8
MERIDIAN BIOSCIENCE, INC.
2021 OMNIBUS AWARD PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
Summary of Nonqualified Stock Option Grant
Meridian Bioscience, Inc., an Ohio corporation (the Company), grants to the Grantee named below, in accordance with the terms of the Meridian Bioscience, Inc. 2021 Omnibus Award Plan, a copy of which is available on the Bank of America Merrill Lynch website at www.benefits.ml.com (the Plan) and this Nonqualified Stock Option Agreement (the Agreement), an option to purchase shares of the Common Stock of the Company (Shares) at an exercise price per Share as described below:
Terms of Agreement
1. Grant of Nonqualified Stock Option. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement and in the Plan, the Company hereby grants to the Grantee as of the Grant Date, an option to purchase Shares of Common Stock of the Company at an exercise price per Share as set forth above (the Option). It is the intent of the Company and the Grantee that the Option will not qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended from time to time.
2. Vesting of Option.
(a) Except as otherwise provided in this Agreement, the Option shall become exercisable according to the vesting schedule set forth above. Prior to the Vesting Date, no portion of the award is vested except as otherwise provided in Section 2.
(b) The Option shall vest in full prior to the Vesting Date(s) upon the occurrence of any of the following: (i) the Grantee dies while in the employ of the Company; (ii) the Grantee satisfies the requirements for Retirement, as defined in the Plan, including separation from employment with the Company; or (iii) the Grantee has a Disability, as defined in the Plan. The Option shall be exercisable for ninety days following the occurrence of the condition described in Section 2(b)(ii), unless the Grantee is required to file beneficial ownership reports under Section 16 of the Exchange Act, in which case the Option shall be exercisable for one year following the occurrence of the condition described in Section 2(b)(ii). The Option shall be exercisable for one year following the occurrence of the conditions described in Sections 2(b)(i) and 2(b)(iii).
(c) The Committee may, in its sole discretion, accelerate the time at which the Option becomes vested and non-forfeitable to a time other than the Vesting Date(s) as provided in Section 2(a) or to a time other than provided in Section (2)(b)(i), (ii), or (iii) on such terms and conditions as it deems appropriate in accordance with the terms and conditions of the Plan.
(d) The extent to which the Option may vest upon a Change in Control is described on Appendix A attached hereto.
3. Forfeiture.
(a) Any portion of the Option that has not yet vested pursuant to Section 2 shall be forfeited automatically without further action or notice if the Grantee ceases to be employed by the Company other than as provided in Section 2 hereof. In addition, in 2020 the Board adopted a compensation recoupment or clawback policy (the Clawback Policy) applicable to all Company officers subject to Section 16 of the Exchange Act.
4. Exercise and Payment.
(a) The Option granted under this Agreement shall be exercisable on the Vesting Date(s) as provided on the first page under Summary of Nonqualified Stock Option Grant herein or earlier as provided in Section 2. The Option granted under this Agreement may not be exercised as to less than twenty-five (25) Shares at any time.
(b) The Option may be exercised for the number of Shares specified by Grantees delivery of instructions through and in accordance with the procedures established under the Merrill Lynch system maintained on behalf of the Company, accompanied by full payment in the manner and subject to the conditions set forth pursuant to the terms of the Plan for the number of Shares in respect of which it is exercised. The Grantee may pay the Exercise Price by means of a broker-assisted cashless exercise pursuant to which the Company or Merrill Lynch, as the case may be, is delivered a copy of irrevocable instructions to a stockbroker to sell Shares of Common Stock otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the Exercise Price and/or the amount of any taxes described in Section 10 below (Broker-Assisted Cashless Exercise). Any fractional Share of Common Stock may be settled in cash in a Broker-Assisted Cashless Exercise.
(c) If any applicable law or regulation requires the Company to take any action with respect to the Shares specified in such notice, or if any action remains to be taken under the Articles of Incorporation or Code of Regulations of the Company to effect due issuance of the Shares, then the Company shall take such action and the day for delivery of such stock shall be extended for the period necessary to take such action.
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5. Transferability. The Option may not be transferred and shall not be subject in any manner to assignment, alienation, pledge, encumbrance or charge, unless otherwise provided under the Plan. Any purported Transfer or encumbrance in violation of the provisions of this Section 5 shall be void, and the other party to any such purported transaction shall not obtain any rights to or interest in the Option.
6. Voting and Other Rights. The Grantee will not have any rights of a shareholder of the Company with respect to the Option until the Option is exercised.
7. Continuous Employment. Unless otherwise specified by the Plan, for purposes of this Agreement, the continuous employment of the Grantee with the Company shall not be deemed to have been interrupted, and the Grantee shall not be deemed to have ceased to be an employee of the Company, by reason of the transfer of his employment among the Company or a leave of absence approved by the Committee.
8. No Employment Contract. Nothing contained in this Agreement shall confer upon the Grantee any right with respect to continuance of employment by the Company, nor limit or affect in any manner the right of the Company to terminate the employment or adjust the compensation of the Grantee.
9. Relation to Other Benefits. Any economic or other benefit to the Grantee under this Agreement or the Plan shall not be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company unless required under the terms of such other plan, and shall not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company.
10. Taxes and Withholding. By his or her acceptance of this Agreement, the Grantee agrees to reimburse the Company for any taxes required by any government to be withheld or otherwise deducted and paid by the Company with respect to the issuance or disposition of the Shares subject to the Option. In lieu thereof, the Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Grantee. The Company may, in its discretion, hold the stock certificate or certificates to which the Grantee is entitled upon the exercise of the Option as security for the payment of such withholding tax liability, until cash sufficient to pay that liability has been accumulated. In addition, at any time that the Company becomes subject to a withholding obligation under applicable law with respect to the exercise of the Option (the Tax Date), except as set forth below, a holder of the Option may elect to satisfy, in whole or in part, the holders related personal tax liabilities (an Election) by (a) directing the Company to withhold from Shares issuable in the related exercise either a specified number of Shares or Shares having a specified value (in each case not in excess of the minimum required tax withholding amount, (b) tendering Shares previously issued pursuant to the exercise of an Award or other Shares owned by the holder, (c) executing a Broker-Assisted Cashless Exercise or (d) combining any or all of the foregoing Elections in any fashion. An Election shall be irrevocable. The withheld Shares and other Shares tendered in payment shall be valued at their Fair Market Value on the Tax Date. The Committee may disapprove of any Election, suspend or terminate the right to make Elections or provide that the right to make Elections shall not apply to particular Shares or exercises. The Committee may impose any additional conditions or restrictions on the right to make an Election as it shall deem appropriate, including any limitations necessary to comply with Section 16 of the Exchange Act.
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11. Adjustments. The number and kind of Shares deliverable pursuant to the Option are subject to adjustment as provided in Section 12 of the Plan.
12. Compliance with Law. While the Company shall make reasonable efforts to comply with all applicable federal and state securities laws and listing requirements with respect to the Shares that may be delivered pursuant hereto, the Company shall not be obligated to deliver any Shares pursuant to this Agreement if the delivery thereof would result in a violation of any such law or listing requirement.
13. Amendments. Subject to the terms of the Plan, the Committee may modify this Agreement upon written notice to the Grantee. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto.
14. Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.
15. Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. This Agreement and the Plan contain the entire agreement and understanding of the parties with respect to the subject matter contained in this Agreement, and supersede all prior written or oral communications, representations and negotiations in respect thereto. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern except with respect to Section 2(a) of this Agreement. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the grant of the Option.
16. Successors and Assigns. Without limiting Section 5, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.
17. No Advice Regarding Award. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Grantees participation in the Plan or the acquisition or sale of the underlying securities. The Grantee is hereby advised to consult with the Grantees personal tax, legal or financial advisors regarding the decision to participate in the Plan before taking any action related to the Plan.
18. Governing Law.
(a) The interpretation, performance, and enforcement of this Agreement, including tort claims, shall be governed by the laws of the State of Ohio, without giving effect to the principles of conflict of laws thereof.
(b) Any party bringing a legal action or proceeding against another party arising out of or relating to this Agreement may bring the legal action or proceeding only in the United States District Court for the Southern District of Ohio and any of the courts of the State of Ohio, in each case sitting in Cincinnati, Ohio.
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(c) Each of the Company and the Grantee waives, to the fullest extent permitted by law, (i) any objection which it may now or later have to the laying of venue of any legal action or proceeding arising out of or relating to this Agreement brought in any court of the State of Ohio sitting in Cincinnati, Ohio or the United States District Court for the Southern District of Ohio sitting in Cincinnati, Ohio, including, without limitation, a motion to dismiss on the grounds of forum non conveniens or lack of subject matter jurisdiction; and (ii) any claim that any action or proceeding brought in any such court has been brought in an inconvenient forum.
(d) Each of the Company and the Grantee submits to the exclusive jurisdiction (both personal and subject matter) of (i) the United States District Court for the Southern District of Ohio sitting in Cincinnati, Ohio and its appellate courts, and (ii) any court of the State of Ohio sitting in Cincinnati, Ohio and its appellate courts, for the purposes of all legal actions and proceedings arising out of or related to this Agreement.
19. Language. If the Grantee receives this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
20. Electronic Delivery. The Grantee hereby consents and agrees to electronic delivery of any documents that the Company may elect to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other forms of communications) in connection with this and any other award made or offered under the Plan. The Grantee understands that, unless earlier revoked by the Grantee by giving written notice to the Secretary of the Company, this consent shall be effective for the duration of the Agreement. The Grantee also understands that he or she shall have the right at any time to request that the Company deliver written copies of any and all materials referred to above at no charge. The Grantee hereby consents to any and all procedures the Company has established or may establish for an electronic signature system for delivery and acceptance of any such documents that the Company may elect to deliver, and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature. The Grantee consents and agrees that any such procedures and delivery may be effected by a third party engaged by the Company to provide administrative services related to the Plan.
[Remainder of page intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officer and the Grantee has also executed this Agreement, as of the Grant Date.
MERIDIAN BIOSCIENCE, INC. | ||
By: | ||
Name: Bryan T. Baldasare | ||
Title: Chief Financial Officer |
You may accept the award online or by telephone in accordance with the procedures established by the Company and the Plan administrator. By accepting your award in accordance with these procedures, you acknowledge that a copy of the Plan, Plan Summary and Prospectus, and the Companys most recent Annual Report and Proxy Statement (the Prospectus Information) either have been received by you or are available for viewing on the Companys intranet site or internet site at www.meridianbioscience.com, and consent to receiving this Prospectus Information electronically, or, in the alternative, agree to contact Julie Smith at (513) 272-5230 to request a paper copy of the Prospectus Information at no charge. You also represent that you are familiar with the terms and provisions of the Prospectus Information and hereby accept the award on the terms and conditions set forth herein and in the Plan. These terms and conditions constitute a legal contract that will bind both you and the Company as soon as you accept the award as described above.
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APPENDIX A
Notwithstanding anything to the contrary in Section 2, in the event of a Change in Control, unless the successor company, or a parent of the successor company in the Change in Control agrees to assume, replace, or substitute the option granted hereunder (as of the consummation of such Change in Control) with an option on substantially identical terms, as determined by the Committee, if the Grantees employment with the Company or its Affiliates (or any successor thereto) is terminated within twenty-four(24) months following a Change in Control either (x) by the Company or its Affiliates (or any successor thereto) without Cause (as defined in the Plan) or (y) by the Grantee with Good Reason, the option granted hereunder shall become vested in its entirety and exercisable as of the date of such termination. As used herein, Good Reason shall mean the occurrence of any of the following: (i) a material diminution in the Grantees authority, duties or responsibilities; (ii) a material diminution in the Grantees annual base salary as in effect on the date of this Agreement or as the same may be increased from time to time; (iii) the Company fails to pay or provide any amount or benefit that the Company is obligated to pay or provide under this Agreement or any other employment, compensation, benefit or reimbursement plan, agreement or arrangement of the Company to which the Grantee is a party or in which the Grantee participates; (iv) the relocation of the Grantees principal place of employment to a location which increases the Grantees one-way commuting distance by more than 50 miles, or the Companys requiring the Grantee to travel on business other than to an extent substantially consistent with the Grantees business travel obligations prior to the Change in Control; (v) a significant adverse change occurs, whether of a quantitative or qualitative nature, in the indemnification protection provided to the Grantee for acts and omissions arising out of his service on behalf of the Company or any other entity at the request of the Company; or (vi) the Company fails to obtain the assumption of this Agreement.
10538495.6
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APPENDIX B
The complete vesting schedule is as follows:
Date |
Percentage of Shares that will Vest |
|
11/4/2022 | 25% | |
12/4/2022 | 2.0833% | |
1/4/2023 | 2.0833% | |
2/4/2023 | 2.0833% | |
3/4/2023 | 2.0833% | |
4/4/2023 | 2.0833% | |
5/4/2023 | 2.0833% | |
6/4/2023 | 2.0833% | |
7/4/2023 | 2.0833% | |
8/4/2023 | 2.0833% | |
9/4/2023 | 2.0833% | |
10/4/2023 | 2.0833% | |
11/4/2023 | 2.0833% | |
12/4/2023 | 2.0833% | |
1/4/2024 | 2.0833% | |
2/4/2024 | 2.0833% | |
3/4/2024 | 2.0833% | |
4/4/2024 | 2.0833% | |
5/4/2024 | 2.0833% | |
6/4/2024 | 2.0833% | |
7/4/2024 | 2.0833% | |
8/4/2024 | 2.0833% | |
9/4/2024 | 2.0833% | |
10/4/2024 | 2.0833% | |
11/4/2024 | 2.0833% | |
12/4/2024 | 2.0833% | |
1/4/2025 | 2.0833% | |
2/4/2025 | 2.0833% | |
3/4/2025 | 2.0833% | |
4/4/2025 | 2.0833% | |
5/4/2025 | 2.0833% | |
6/4/2025 | 2.0833% | |
7/4/2025 | 2.0833% | |
8/4/2025 | 2.0833% | |
9/4/2025 | 2.0833% | |
10/4/2025 | 2.0833% | |
11/4/2025 | 2.0845% |
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Exhibit 21
Subsidiaries of the Registrant
1. |
Meridian Bioscience Corporation, an Ohio corporation |
2. |
Meridian Life Science, Inc., a Maine corporation |
3. |
Meridian Bioscience Europe, s.r.l., an Italian corporation |
4. |
Meridian Bioscience Europe S.A., a Belgian corporation |
5. |
Meridian Bioscience Europe B.V., a Dutch corporation |
6. |
Meridian Bioscience UK Ltd., a United Kingdom corporation |
7. |
Meridian Bioscience International Ltd., a United Kingdom corporation |
8. |
Meridian Bioscience Beijing, LLC, a Wholly Foreign Owned Enterprise located in Beijing, China |
9. |
Meridian Bioscience Canada, Inc., a Canadian corporation |
10. |
Meridian Bioscience Israel Holding Ltd, an Israeli corporation |
11. |
Bioline Ltd., a United Kingdom corporation |
12. |
Bioline Reagents Ltd., a United Kingdom corporation |
13. |
Bioline GmbH, a German corporation |
14. |
Bioline (Aust) Pty Ltd., an Australian corporation |
15. |
Magellan Biosciences, Inc., a Delaware corporation |
16. |
Magellan Diagnostics, Inc., a Delaware corporation |
17. |
Meridian Bioscience Israel Ltd., an Israeli corporation |
18. |
Jiangsu Exalenz Medical Device Co. Ltd., a Wholly Foreign Owned Enterprise located in China |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
(1) |
Registration Statement (Form S-8 No. 333-122554) pertaining to the 2004 Equity Compensation Plan of Meridian Bioscience, Inc.; |
(2) |
Registration Statement (Form S-8 No. 333-155703) pertaining to the 2004 Equity Compensation Plan (as Amended and Restated Through January 22, 2008) of Meridian Bioscience, Inc.; |
(3) |
Registration Statement (Form S-8 No. 333-179440) pertaining to the 2012 Stock Incentive Plan of Meridian Bioscience, Inc.; |
(4) |
Registration Statement (Form S-8 No. 333-252538) pertaining to the 2021 Omnibus Award Plan of Meridian Bioscience Inc.; and |
(5) |
Registration Statement (Form S-3 File No. 333-250878) of Meridian Bioscience, Inc.; |
of our reports dated November 23, 2021, with respect to the consolidated financial statements and schedule of Meridian Bioscience, Inc. and the effectiveness of internal control over financial reporting of Meridian Bioscience, Inc. included in this Annual Report (Form 10-K) of Meridian Bioscience, Inc. for the year ended September 30, 2021.
/s/ Ernst & Young LLP
Cincinnati, Ohio
November 23, 2021
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
We have issued our report dated November 23, 2020, with respect to the consolidated financial statements included in the Annual Report of Meridian Bioscience, Inc. on Form 10-K for the year ended September 30, 2021. We consent to the incorporation by reference of said reports in the Registration Statements of Meridian Bioscience, Inc. on Form S-3 (File No. 333-250878), and on Forms S-8 (File No. 333-179440, File No. 333-155703, File No. 333-122554 and File No. 333-252538).
/s/ GRANT THORNTON LLP
Cincinnati, Ohio
November 23, 2021
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 annual report on Form 10-K 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 control 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 (the registrants fourth fiscal quarter in the case of an annual report) 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 the 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: November 23, 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 annual report on Form 10-K 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 control 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 (the registrants fourth fiscal quarter in the case of an annual report) 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 the 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: November 23, 2021
/s/ Bryan T. Baldasare |
Bryan T. Baldasare |
Executive Vice President and |
Chief Financial Officer |
Exhibit 32
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 Annual Report of Meridian Bioscience, Inc. (the Company) on Form 10-K for the period ended September 30, 2021 (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 |
November 23, 2021 |
/s/ Bryan T. Baldasare |
Bryan T. Baldasare |
Executive Vice President and |
Chief Financial Officer |
November 23, 2021 |