##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended June 30, 2008
  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from to
 Commission file number 0-14902
 MERIDIAN BIOSCIENCE, INC.
 
 Incorporated under the laws of Ohio
    
    31-0888197(I.R.S. Employer Identification No.)
 
  þ o
  Large accelerated filer
o
    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
  o þ
  Class
    
    Outstanding July 31, 2008Common Stock, no par value
    
    40,220,808




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##### 



MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
 Page(s)PART I            FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)Consolidated Statements of OperationsThree Months Ended June 30, 2008 and 2007Nine Months Ended June 30, 2008 and 2007
    
    
    3Consolidated Statements of Cash FlowsNine Months Ended June 30, 2008 and 2007
    
    
    4Consolidated Balance SheetsJune 30, 2008 and September 30, 2007
    
    
    5-6Consolidated Statement of Changes in Shareholders EquityNine Months Ended June 30, 2008
    
    
    7Notes to Consolidated Financial Statements
    
    
    8-16Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    17-24Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 4. Controls and Procedures
    
    
    24PART II. OTHER INFORMATIONItem 1A. Risk Factors
    
    
    25Item 6. Exhibits
    
    
    25Signature
    
    
    26EX-31.1EX-31.2EX-32
  The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation
for forward-looking statements accompanied by meaningful cautionary statements. Except for
historical information, this report contains forward-looking statements which may be identified by
words such as estimates, anticipates, projects, plans, seeks, may, will, expects,
intends, believes, should and similar expressions or the negative versions thereof and which
also may be identified by their context. Such statements, whether expressed or implied, are based
upon current expectations of the Company and speak only as of the date made. The Company assumes no
obligation to publicly update any forward-looking statements. These statements are subject to
various risks, uncertainties and other factors that could cause actual results to differ
materially, including, without limitation, the following: Meridians continued growth depends, in
part, on its ability to introduce into the marketplace enhancements of existing products or new
products that incorporate technological advances, meet customer requirements and respond to
products developed by Meridians competition. While Meridian has introduced a number of internally
developed products, there can be no assurance that it will be successful in the future in
introducing such products on a timely basis. Ongoing consolidations of reference laboratories and
formation of multi-hospital alliances may cause adverse changes to pricing and distribution. Costs
and difficulties in complying with laws and regulations administered by the United States Food and
Drug Administration can result in unanticipated expenses and delays and interruptions to the sale
of new and existing products. Changes in the relative strength or weakness of the US dollar can
change expected results. One of Meridians main growth strategies is the acquisition of companies
and product lines. There can be no assurance that additional acquisitions will be consummated or
that, if consummated, will be successful and the acquired businesses successfully integrated into
Meridians operations. In addition to the factors described in this paragraph, Part I, Item 1A Risk
Factors of our Form 10-K contains a list of uncertainties and risks that may affect the financial
performance of the Company.
 Page 2 of 26




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MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
  Consolidated Statements of Operations (Unaudited)
 (in thousands, except per share data)
 Three Months
    
    Nine MonthsEnded June 30,
    
    Ended June 30,2008
    
    2007
    
    2008
    
    2007NET SALES
    
    $
    33,068
    
    
    $
    29,763
    
    
    $
    103,164
    
    
    $
    90,577COST OF SALES
    
    
    11,781
    
    
    
    10,462
    
    
    
    39,010
    
    
    
    34,826Gross profit
    
    
    21,287
    
    
    
    19,301
    
    
    
    64,154
    
    
    
    55,751OPERATING EXPENSES:Research and development
    
    
    1,322
    
    
    
    1,306
    
    
    
    4,372
    
    
    
    4,339Sales and marketing
    
    
    4,459
    
    
    
    4,072
    
    
    
    13,697
    
    
    
    12,331General and administrative
    
    
    4,507
    
    
    
    4,435
    
    
    
    13,155
    
    
    
    12,686Total operating expenses
    
    
    10,288
    
    
    
    9,813
    
    
    
    31,224
    
    
    
    29,356Operating income
    
    
    10,999
    
    
    
    9,488
    
    
    
    32,930
    
    
    
    26,395OTHER INCOME (EXPENSE):Interest income
    
    
    297
    
    
    
    409
    
    
    
    1,148
    
    
    
    1,161Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38
    )Other, net
    
    
    183
    
    
    
    (45
    )
    
    
    156
    
    
    
    46Total other income (expense)
    
    
    480
    
    
    
    364
    
    
    
    1,304
    
    
    
    1,169Earnings before income taxes
    
    
    11,479
    
    
    
    9,852
    
    
    
    34,234
    
    
    
    27,564INCOME TAX PROVISION
    
    
    3,716
    
    
    
    1,038
    
    
    
    11,716
    
    
    
    7,287NET EARNINGS
    
    $
    7,763
    
    
    $
    8,814
    
    
    $
    22,518
    
    
    $
    20,277BASIC EARNINGS PER COMMON SHARE
    
    $
    0.19
    
    
    $
    0.22
    
    
    $
    0.56
    
    
    $
    0.51DILUTED EARNINGS PER COMMON SHARE
    
    $
    0.19
    
    
    $
    0.22
    
    
    $
    0.55
    
    
    $
    0.50AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING  BASIC
    
    
    40,150
    
    
    
    39,729
    
    
    
    40,043
    
    
    
    39,462DILUTIVE COMMON STOCK OPTIONS
    
    
    900
    
    
    
    991
    
    
    
    975
    
    
    
    968AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING  DILUTED
    
    
    41,050
    
    
    
    40,720
    
    
    
    41,018
    
    
    
    40,430ANTI-DILUTIVE SECURITIES:Common stock options
    
    
    100
    
    
    
    5
    
    
    
    52
    
    
    
    3DIVIDENDS DECLARED PER COMMON SHARE
    
    $
    0.14
    
    
    $
    0.11
    
    
    $
    0.39
    
    
    $
    0.29
  Page 3 of 26




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MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
 
 Consolidated Statements of Cash Flows (Unaudited)
 (dollars in thousands)
 Nine Months Ended June 30,
    
    2008
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net earnings
    
    $
    22,518
    
    
    $
    20,277Non-cash items:Depreciation of property, plant and equipment
    
    
    2,142
    
    
    
    2,065Amortization of intangible assets and deferred costs
    
    
    1,206
    
    
    
    1,227Stock based compensation
    
    
    1,190
    
    
    
    1,231Discrete tax contingency reserve adjustment
    
    
    
    
    
    
    (2,425
    )Deferred income taxes
    
    
    649
    
    
    
    1,073Loss on disposition of fixed assets
    
    
    52
    
    
    
    2Change in accounts receivable, inventory, and prepaid expenses
    
    
    (1,073
    )
    
    
    369Change in accounts payable, accrued expenses, and income
taxes payable
    
    
    (4,274
    )
    
    
    (5,300
    )Other
    
    
    (276
    )
    
    
    (92
    )Net cash provided by operating activities
    
    
    22,134
    
    
    
    18,427CASH FLOWS FROM INVESTING ACTIVITIES:Acquisitions of property, plant and equipment
    
    
    (2,905
    )
    
    
    (2,168
    )Proceeds from sales of property, plant and equipment
    
    
    12
    
    
    
    4Purchase of intangibles and other assets
    
    
    (1,108
    )
    
    
    (265
    )Acquisition earnout payments
    
    
    (157
    )
    
    
    (971
    )(Purchases) proceeds from sales of short-term investments
    
    
    (7,750
    )
    
    
    4,000Net cash provided by (used for) investing activities
    
    
    (11,908
    )
    
    
    600CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of debt obligations
    
    
    
    
    
    
    (29
    )Dividends paid
    
    
    (15,624
    )
    
    
    (11,461
    )Proceeds and tax benefits from exercises of stock options
    
    
    2,780
    
    
    
    2,017Net cash used for financing activities
    
    
    (12,844
    )
    
    
    (9,473
    )Effect of Exchange Rate Changes on Cash and Equivalents
    
    
    268
    
    
    
    104Net Increase (Decrease) in Cash and Equivalents
    
    
    (2,350
    )
    
    
    9,658Cash and Equivalents at Beginning of Period
    
    
    49,400
    
    
    
    36,348Cash and Equivalents at End of Period
    
    $
    47,050
    
    
    $
    46,006
  Page 4 of 26




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MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
 
 Consolidated Balance Sheets (Unaudited)
 (dollars in thousands)
 ASSETS
 June 30,
    
    September 30,CURRENT ASSETS:
    
    2008
    
    2007Cash and equivalents
    
    $
    47,050
    
    
    $
    49,400Accounts receivable, less allowances of $229 and $258
    
    
    22,134
    
    
    
    22,651Inventories
    
    
    21,034
    
    
    
    18,171Prepaid expenses and other current assets
    
    
    2,251
    
    
    
    2,147Deferred income taxes
    
    
    1,791
    
    
    
    1,376Total current assets
    
    
    94,260
    
    
    
    93,745PROPERTY, PLANT AND EQUIPMENT:Land
    
    
    908
    
    
    
    890Buildings and improvements
    
    
    17,045
    
    
    
    16,907Machinery, equipment and furniture
    
    
    26,141
    
    
    
    24,619Construction in progress
    
    
    2,482
    
    
    
    1,290Subtotal
    
    
    46,576
    
    
    
    43,706Less: accumulated depreciation and amortization
    
    
    27,502
    
    
    
    25,395Net property, plant and equipment
    
    
    19,074
    
    
    
    18,311OTHER ASSETS:Goodwill
    
    
    9,965
    
    
    
    9,964Other intangible assets, net
    
    
    9,197
    
    
    
    9,457Restricted cash
    
    
    1,000
    
    
    
    1,000Investments in auction rate securities
    
    
    7,518
    
    
    
    Other assets
    
    
    216
    
    
    
    221Total other assets
    
    
    27,896
    
    
    
    20,642TOTAL ASSETS
    
    $
    141,230
    
    
    $
    132,698
  Page 5 of 26




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MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(dollars in thousands)
 LIABILITIES AND SHAREHOLDERS EQUITY
 June 30,
    
    September 30,2008
    
    2007CURRENT LIABILITIES:Accounts payable
    
    $
    3,266
    
    
    $
    4,704Accrued employee compensation costs
    
    
    4,640
    
    
    
    7,541Purchase business combination liability
    
    
    
    
    
    
    152Other accrued expenses
    
    
    4,768
    
    
    
    4,008Income taxes payable
    
    
    1,665
    
    
    
    662Total current liabilities
    
    
    14,339
    
    
    
    17,067DEFERRED INCOME TAXES
    
    
    2,517
    
    
    
    2,683COMMITMENTS AND CONTINGENCIESSHAREHOLDERS EQUITY:Preferred stock, no par value, 1,000,000 shares
authorized, none issued
    
    
    
    
    
    
    Common shares, no par
value, 71,000,000 shares authorized,
40,156,082 and 39,847,391 shares issued, respectively
    
    
    
    
    
    
    Additional paid-in capital
    
    
    86,614
    
    
    
    82,209Retained earnings
    
    
    36,964
    
    
    
    30,375Accumulated other comprehensive income
    
    
    796
    
    
    
    364Total shareholders equity
    
    
    124,374
    
    
    
    112,948TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    141,230
    
    
    $
    132,698
  Page 6 of 26




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MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
 
 Consolidated Statement of Changes in Shareholders Equity (Unaudited)
 (dollars and shares in thousands)
 AccumulatedCommon
    
    
    Additional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalShares
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Comprehensive
    
    
    ShareholdersIssued
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Income (Loss)
    
    
    EquityBalance at September 30, 2007
    
    
    39,847
    
    
    $
    82,209
    
    
    $
    30,375
    
    
    $
    364
    
    
    
    
    
    
    $
    112,948Adoption of FASB Interpretation No. 48
    
    
    
    
    
    
    
    
    
    
    (305
    )
    
    
    
    
    
    
    
    
    
    
    (305
    )Dividends paid
    
    
    
    
    
    
    
    
    
    
    (15,624
    )
    
    
    
    
    
    
    
    
    
    
    (15,624
    )Exercise of stock options, net of tax
    
    
    309
    
    
    
    3,215
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,215Stock based compensation
    
    
    
    
    
    
    1,190
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,190Comprehensive income:Net earnings
    
    
    
    
    
    
    
    
    
    
    22,518
    
    
    
    
    
    
    $
    22,518
    
    
    
    22,518Hedging activity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (144
    )
    
    
    (144
    )
    
    
    (144
    )Unrealized loss on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (233
    )
    
    
    (233
    )
    
    
    (233
    )Other comprehensive income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (235
    )
    
    
    (235
    )
    
    
    (235
    )Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,044
    
    
    
    1,044
    
    
    
    1,044Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    22,950Balance at June 30, 2008
    
    
    40,156
    
    
    $
    86,614
    
    
    $
    36,964
    
    
    $
    796
    
    
    
    
    
    
    $
    124,374
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MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
 
 Notes to Consolidated Financial Statements
(Unaudited)
 Basis of Presentation:
     Significant Accounting Policies :
 (a) Revenue Recognition 
  Revenue Arrangements with Multiple
Deliverables
 Page 8 of 26




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(b) Comprehensive Income 
    Three Months
    
    Nine MonthsEnded June 30,
    
    Ended June 30,2008
    
    2007
    
    2008
    
    2007Net earnings
    
    $
    7,763
    
    
    $
    8,814
    
    
    $
    22,518
    
    
    $
    20,277Hedging activity
    
    
    230
    
    
    
    5
    
    
    
    (144
    )
    
    
    (28
    )Unrealized loss on investments
    
    
    
    
    
    
    
    
    
    
    (233
    )
    
    
    Income taxes
    
    
    (84
    )
    
    
    (34
    )
    
    
    (235
    )
    
    
    (151
    )Foreign currency translation adjustment
    
    
    10
    
    
    
    91
    
    
    
    1,044
    
    
    
    455Comprehensive income
    
    $
    7,919
    
    
    $
    8,876
    
    
    $
    22,950
    
    
    $
    20,553
 (c) Income Taxes 
  Page 9 of 26




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Accounting for Uncertainty in
Income Taxes
   (d) Share-based Compensation 
 Share-Based
Payment
 (e) Cash, Cash Equivalents and Investments 
 Accounting for Certain Investments
in Debt and Equity Securities
 Page 10 of 26




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June 30, 2008
    
    September 30, 2007Cash and
    
    Other
    
    Cash and
    
    OtherEquivalents
    
    Assets
    
    Equivalents
    
    AssetsTaxable investments Repurchase agreements
    
    $
    6,889
    
    
    $
    
    
    
    $
    7,751
    
    
    $
    Money market funds
    
    
    2,483
    
    
    
    
    
    
    
    
    
    
    
    Tax-exempt investments Money market funds
    
    
    8,122
    
    
    
    
    
    
    
    2,536
    
    
    
    Variable rate demand notes
    
    
    24,277
    
    
    
    
    
    
    
    36,069
    
    
    
    Student loan auction-rate securities
    
    
    
    
    
    
    7,518
    
    
    
    
    
    
    
    Cash on hand Restricted
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    1,000Unrestricted
    
    
    5,279
    
    
    
    
    
    
    
    3,044
    
    
    
    Total
    
    $
    47,050
    
    
    $
    8,518
    
    
    $
    49,400
    
    
    $
    1,000
      Page 11 of 26




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(f) New Accounting Pronouncements 
 Business Combinations
 Determination of the Useful Life of
Intangible Assets Goodwill and Other Intangible
Assets.
 Disclosures about Derivative Instruments and
Hedging Activities  an amendment of FASB Statement No. 133
 Page 12 of 26




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(g) Reclassifications 
  Inventories :
  June 30,
    
    September 30,2008
    
    2007Raw materials
    
    $
    5,445
    
    
    $
    4,816Work-in-process
    
    
    5,268
    
    
    
    5,141Finished goods
    
    
    10,321
    
    
    
    8,214$
    21,034
    
    
    $
    18,171
 Accounting Changes and Error Corrections
 4. Major Customers and Segment Information :
  Page 13 of 26




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US
    
    European
    
    LifeDiagnostics
    
    Diagnostics
    
    Science
    
    Eliminations(1)
    
    TotalThree Months  June 30, 2008Net sales -Third-party
    
    $
    19,406
    
    
    $
    8,016
    
    
    $
    5,646
    
    
    $
    
    
    
    $
    33,068Inter-segment
    
    
    3,355
    
    
    
    
    
    
    
    162
    
    
    
    (3,517
    )
    
    
    Operating income
    
    
    8,890
    
    
    
    1,720
    
    
    
    774
    
    
    
    (385
    )
    
    
    10,999Total assets (June 30, 2008)
    
    
    119,846
    
    
    
    18,236
    
    
    
    48,516
    
    
    
    (45,368
    )
    
    
    141,230Three Months  June 30, 2007Net sales -Third-party
    
    $
    17,065
    
    
    $
    6,279
    
    
    $
    6,419
    
    
    $
    
    
    
    $
    29,763Inter-segment
    
    
    2,619
    
    
    
    
    
    
    
    117
    
    
    
    (2,736
    )
    
    
    Operating income
    
    
    6,842
    
    
    
    1,517
    
    
    
    1,297
    
    
    
    (168
    )
    
    
    9,488Total assets (September 30,
2007)
    
    
    115,297
    
    
    
    13,600
    
    
    
    45,410
    
    
    
    (41,609
    )
    
    
    132,698Nine Months  June 30, 2008Net sales -Third-party
    
    $
    64,878
    
    
    $
    21,709
    
    
    $
    16,577
    
    
    $
    
    
    
    $
    103,164Inter-segment
    
    
    8,926
    
    
    
    2
    
    
    
    440
    
    
    
    (9,368
    )
    
    
    Operating income
    
    
    26,669
    
    
    
    4,470
    
    
    
    2,117
    
    
    
    (326
    )
    
    
    32,930Nine Months  June 30, 2007Net sales -Third-party
    
    $
    55,885
    
    
    $
    17,808
    
    
    $
    16,884
    
    
    $
    
    
    
    $
    90,577Inter-segment
    
    
    6,880
    
    
    
    
    
    
    
    475
    
    
    
    (7,355
    )
    
    
    Operating income
    
    
    20,653
    
    
    
    3,793
    
    
    
    2,194
    
    
    
    (245
    )
    
    
    26,395
 (1)
    
    Eliminations consist of intersegment transactions.  Page 14 of 26




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5. Intangible Assets :
  WtdAvg
    
    June 30, 2008
    
    September 30, 2007Amort
    
    Gross
    
    
    
    
    
    GrossPeriod
    
    Carrying
    
    Accumulated
    
    Carrying
    
    Accumulated(Yrs)
    
    Value
    
    Amortization
    
    Value
    
    AmortizationCore products and cell lines
    
    
    15
    
    
    $
    4,698
    
    
    $
    2,530
    
    
    $
    4,698
    
    
    $
    2,313Manufacturing technologies
    
    
    14
    
    
    
    6,057
    
    
    
    4,356
    
    
    
    5,907
    
    
    
    4,089Trademarks, licenses and patents
    
    
    8
    
    
    
    2,663
    
    
    
    1,811
    
    
    
    2,270
    
    
    
    1,694Customer lists and supply agreements
    
    
    13
    
    
    
    11,046
    
    
    
    6,570
    
    
    
    10,641
    
    
    
    5,963$
    24,464
    
    
    $
    15,267
    
    
    $
    23,516
    
    
    $
    14,059
  6. Hedging Transactions :
    Notional
    
    Contract
    
    Estimated Fair
    
    Average ExchangeAmount
    
    Value
    
    Value
    
    Rate
    
    Maturity1,200
    
    $
    1,654
    
    
    $
    1,883
    
    
    
    1.3783
    
    
    FY 2008   900
    
    $
    1,289
    
    
    $
    1,403
    
    
    
    1.4322
    
    
    FY 2009
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Liability DerivativesJune 30, 2008
    
    
    September 30, 2007Balance Sheet
    
    
    Fair
    
    
    Balance Sheet
    
    
    FairLocation
    
    
    Value
    
    
    Location
    
    
    ValueDerivatives designated as
hedging instruments under SFAS
No. 133Foreign exchange contracts
    
    Accrued expenses
    
    $
    343
    
    
    Accrued expenses
    
    $
    256Total derivatives designated
as hedging instruments under
SFAS No. 133
    
    
    
    
    
    $
    343
    
    
    
    
    
    
    $
    256Total derivatives
    
    
    
    
    
    $
    343
    
    
    
    
    
    
    $
    256
  Location ofGain or(Loss)ReclassifiedfromAccumulatedOCI intoIncome
    
    Amount of Gain or (Loss) Reclassified fromAmount of Gain or (Loss) Recognized in OCI on
    
    (Effective
    
    Accumulated OCI into Income (EffectiveDerivative (Effective Portion)
    
    Portion)
    
    Portion1)Three months ended
    
    Nine months ended
    
    
    
    
    
    Three months ended
    
    Nine months endedJune 30,
    
    June 30,
    
    
    
    
    
    June 30,
    
    June 30,2008
    
    2007
    
    2008
    
    2007
    
    
    
    
    
    2008
    
    2007
    
    2008
    
    2007Foreign exchange
contracts
    
    $
    9
    
    
    $
    (5
    )
    
    $
    (544
    )
    
    $
    (100
    )
    
    Net Sales
    
    $
    (221
    )
    
    $
    (9
    )
    
    $
    (400
    )
    
    $
    (71
    )
 1
    
    No portion of the gain/loss was excluded from other comprehensive income due to
effectiveness testing.  7. Asset purchase:
  Page 16 of 26




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##### Table of Contents



Refer to Forward Looking Statements following the Index in front of this Form 10-Q.
 Overview :
     Three Months June 30,
    
    Nine Months June 30,2008
    
    2007
    
    2008
    
    2007Net Earnings -US GAAP basis
    
    $
    7,763
    
    
    $
    8,814
    
    
    $
    22,518
    
    
    $
    20,277Tax benefit not expected to recur in the future
    
    
    
    
    
    
    (2,425
    )
    
    
    
    
    
    
    (2,425
    )Excluding tax benefit
    
    $
    7,763
    
    
    $
    6,389
    
    
    $
    22,518
    
    
    $
    17,852
 Three Months June 30,
    
    Nine Months June 30,2008
    
    2007
    
    2008
    
    2007Net Earnings per Basic Common Share -US GAAP basis
    
    $
    0.19
    
    
    $
    0.22
    
    
    $
    0.56
    
    
    $
    0.51Tax benefit not expected to recur in the future
    
    
    
    
    
    
    (0.06
    )
    
    
    
    
    
    
    (0.06
    )Excluding tax benefit
    
    $
    0.19
    
    
    $
    0.16
    
    
    $
    0.56
    
    
    $
    0.45
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##### Table of Contents



Three Months June 30,
    
    Nine Months June 30,2008
    
    2007
    
    2008
    
    2007Net Earnings per Diluted Common Share -US GAAP basis
    
    $
    0.19
    
    
    $
    0.22
    
    
    $
    0.55
    
    
    $
    0.50Tax benefit not expected to recur in the future
    
    
    
    
    
    
    (0.06
    )
    
    
    
    
    
    
    (0.06
    )Excluding tax benefit
    
    $
    0.19
    
    
    $
    0.16
    
    
    $
    0.55
    
    
    $
    0.44
 Diagnostics
 C.
difficile H. pylori C. difficile
 Card ® E. coli
 ®
 C difficile H. pylori C. difficile H. pylori H. pylori H. pylori
 Life Science
  Operating Segments :
  Page 18 of 26




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Results of Operations
 Net sales
 Three Months Ended June 30
    
    Nine Months Ended June 30Inc
    
    
    
    
    
    
    
    
    
    Inc2008
    
    2007
    
    (Dec)
    
    2008
    
    2007
    
    (Dec)US Diagnostics
    
    $
    19,406,000
    
    
    $
    17,065,000
    
    
    
    14
    %
    
    $
    64,878,000
    
    
    $
    55,885,000
    
    
    
    16
    %European Diagnostics
    
    
    8,016,000
    
    
    
    6,279,000
    
    
    
    28
    %
    
    
    21,709,000
    
    
    
    17,808,000
    
    
    
    22
    %Life Science
    
    
    5,646,000
    
    
    
    6,419,000
    
    
    
    (12
    )%
    
    
    16,577,000
    
    
    
    16,884,000
    
    
    
    (2
    )%Consolidated
    
    $
    33,068,000
    
    
    $
    29,763,000
    
    
    
    11
    %
    
    $
    103,164,000
    
    
    $
    90,577,000
    
    
    
    14
    %International US Export
    
    $
    4,405,000
    
    
    $
    3,603,000
    
    
    
    22
    %
    
    $
    11,654,000
    
    
    $
    10,294,000
    
    
    
    13
    %European Diagnostics
    
    
    8,016,000
    
    
    
    6,279,000
    
    
    
    28
    %
    
    
    21,709,000
    
    
    
    17,808,000
    
    
    
    22
    %Total
    
    $
    12,421,000
    
    
    $
    9,882,000
    
    
    
    26
    %
    
    $
    33,363,000
    
    
    $
    28,102,000
    
    
    
    19
    %% of total sales
    
    
    38
    %
    
    
    33
    %
    
    
    
    
    
    
    32
    %
    
    
    31
    %
 C. difficile H. pylori Card ® C. difficile Card ® H. pylori
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C. difficile Card ®
  Gross Profit
 Three Months Ended June 30
    
    Nine Months Ended June 30Inc
    
    
    
    
    
    
    
    
    
    Inc2008
    
    2007
    
    (Dec)
    
    2008
    
    2007
    
    (Dec)Gross Profit
    
    $
    21,287,000
    
    
    $
    19,301,000
    
    
    
    10
    %
    
    $
    64,154,000
    
    
    $
    55,751,000
    
    
    
    15
    %Gross Profit Margin
    
    
    64.4
    %
    
    
    64.8
    %
    
    
    (0.4
    )%
    
    
    62.2
    %
    
    
    61.6
    %
    
    
    0.6
    %
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Operating Expenses
 Three Months Ended June 30
    
    Nine Months Ended June 30Research &
    
    Sales &
    
    General &
    
    Research &
    
    Sales &
    
    General &Development
    
    Marketing
    
    Administrative
    
    Development
    
    Marketing
    
    Administrative2007 Expenses
    
    $
    1,306,000
    
    
    $
    4,072,000
    
    
    $
    4,435,000
    
    
    $
    4,339,000
    
    
    $
    12,331,000
    
    
    $
    12,686,000% of Sales
    
    
    4
    %
    
    
    14
    %
    
    
    15
    %
    
    
    5
    %
    
    
    14
    %
    
    
    14
    %Fiscal 2008 Increases
(Decreases):US Diagnostics
    
    
    146,000
    
    
    
    300,000
    
    
    
    (183,000
    )
    
    
    252,000
    
    
    
    1,237,000
    
    
    
    114,000European Diagnostics
    
    
    
    
    
    
    203,000
    
    
    
    59,000
    
    
    
    
    
    
    
    320,000
    
    
    
    152,000Life Science
    
    
    (130,000
    )
    
    
    (116,000
    )
    
    
    196,000
    
    
    
    (219,000
    )
    
    
    (191,000
    )
    
    
    203,0002008 Expenses
    
    $
    1,322,000
    
    
    $
    4,459,000
    
    
    $
    4,507,000
    
    
    $
    4,372,000
    
    
    $
    13,697,000
    
    
    $
    13,155,000% of Sales
    
    
    4
    %
    
    
    13
    %
    
    
    14
    %
    
    
    4
    %
    
    
    13
    %
    
    
    13
    %% Increase
(Decrease)
    
    
    1
    %
    
    
    10
    %
    
    
    2
    %
    
    
    1
    %
    
    
    11
    %
    
    
    4
    %
  ®
   Operating Income
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Other Income and Expense
  Income Taxes
  Accounting for Uncertainty in
Income Taxes
 Liquidity and Capital Resources :
 Comparative Cash Flow Analysis
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Capital Resources
     Student Loan Auction-Rate Securities
   Page 23 of 26




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PART II. OTHER INFORMATION
 
   
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MERIDIAN BIOSCIENCE, INC.Date:  August 8, 2008
    /s/ Melissa LuekeMelissa LuekeVice President and Chief Financial Officer Page 26 of 26