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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, 2007
 OR
 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
  o þ o
  o þ
  Class
    
    Outstanding July 31, 2007Common Stock, no par value
    
    39,794,645




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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 Operations
Three Months Ended June 30, 2007 and 2006
Nine Months Ended June 30, 2007 and 2006
    
    
    3Consolidated Statements of Cash Flows
Nine Months Ended June 30, 2007 and 2006
    
    
    4Consolidated Balance Sheets
June 30, 2007 and September 30, 2006
    
    
    5-6Consolidated Statement of Changes in Shareholders Equity
Nine Months Ended June 30, 2007
    
    
    7Notes to Consolidated Financial Statements
    
    
    8-14Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14-21Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    21PART II. OTHER INFORMATIONItem 1A. Risk Factors
    
    
    22Item 6. Exhibits
    
    
    22Signature
    
    
    23EX-10.28.AEX-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 U.S. 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. We incorporate that section of that Form 10-K in this filing and
investors should refer to it. You should understand that it is not possible to predict or
identify all such factors. Consequently, you should not consider any such list to be a complete
set of all potential risks or uncertainties.
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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 30,2007
    
    2006
    
    2007
    
    2006NET SALES
    
    $
    29,763
    
    
    $
    26,583
    
    
    $
    90,577
    
    
    $
    79,763COST OF SALES
    
    
    10,477
    
    
    
    10,228
    
    
    
    34,871
    
    
    
    31,678Gross profit
    
    
    19,286
    
    
    
    16,355
    
    
    
    55,706
    
    
    
    48,085OPERATING EXPENSES:Research and development
    
    
    1,306
    
    
    
    1,278
    
    
    
    4,339
    
    
    
    3,633Sales and marketing
    
    
    4,072
    
    
    
    4,009
    
    
    
    12,331
    
    
    
    12,376General and administrative
    
    
    4,435
    
    
    
    4,175
    
    
    
    12,686
    
    
    
    12,036Total operating expenses
    
    
    9,813
    
    
    
    9,462
    
    
    
    29,356
    
    
    
    28,045Operating income
    
    
    9,473
    
    
    
    6,893
    
    
    
    26,350
    
    
    
    20,040OTHER INCOME (EXPENSE):Interest income
    
    
    409
    
    
    
    290
    
    
    
    1,161
    
    
    
    777Interest expense
    
    
    
    
    
    
    (29
    )
    
    
    (38
    )
    
    
    (96
    )Other, net
    
    
    (45
    )
    
    
    155
    
    
    
    46
    
    
    
    126Total other income (expense)
    
    
    364
    
    
    
    416
    
    
    
    1,169
    
    
    
    807Earnings before income taxes
    
    
    9,837
    
    
    
    7,309
    
    
    
    27,519
    
    
    
    20,847INCOME TAX PROVISION
    
    
    1,033
    
    
    
    2,447
    
    
    
    7,270
    
    
    
    7,300NET EARNINGS
    
    $
    8,804
    
    
    $
    4,862
    
    
    $
    20,249
    
    
    $
    13,547BASIC EARNINGS PER COMMON SHARE
    
    $
    0.22
    
    
    $
    0.12
    
    
    $
    0.51
    
    
    $
    0.35DILUTED EARNINGS PER COMMON SHARE
    
    $
    0.22
    
    
    $
    0.12
    
    
    $
    0.50
    
    
    $
    0.34AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC
    
    
    39,729
    
    
    
    39,145
    
    
    
    39,462
    
    
    
    39,105DILUTIVE COMMON STOCK OPTIONS
    
    
    991
    
    
    
    1,037
    
    
    
    968
    
    
    
    1,047AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - DILUTED
    
    
    40,720
    
    
    
    40,182
    
    
    
    40,430
    
    
    
    40,152ANTI-DILUTIVE SECURITIES:Common stock options
    
    
    5
    
    
    
    6
    
    
    
    3
    
    
    
    15Shares from convertible debentures
    
    
    
    
    
    
    283
    
    
    
    
    
    
    
    283DIVIDENDS DECLARED PER COMMON SHARE
    
    $
    0.11
    
    
    $
    0.08
    
    
    $
    0.29
    
    
    $
    0.21
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MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
 
 Consolidated Statements of Cash Flows (Unaudited)
 (dollars in thousands)
 Nine Months Ended June 30,
    
    2007
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net earnings
    
    $
    20,249
    
    
    $
    13,547Non-cash items:Depreciation of property, plant and equipment
    
    
    2,065
    
    
    
    1,997Amortization of intangible assets and deferred costs
    
    
    1,227
    
    
    
    1,307Stock based compensation
    
    
    1,231
    
    
    
    800Tax contingency reserve adjustment
    
    
    (2,425
    )
    
    
    Deferred income taxes
    
    
    1,056
    
    
    
    915Loss on disposition of fixed assets
    
    
    2
    
    
    
    39Change in accounts receivable, inventory, and prepaid expenses
    
    
    414
    
    
    
    (2,257
    )Change in accounts payable, accrued expenses, and income
taxes payable
    
    
    (5,300
    )
    
    
    (1,945
    )Other
    
    
    (92
    )
    
    
    43Net cash provided by operating activities
    
    
    18,427
    
    
    
    14,446CASH FLOWS FROM INVESTING ACTIVITIES:Acquisitions of property, plant and equipment
    
    
    (2,168
    )
    
    
    (2,570
    )Proceeds from dispositions of property, plant and equipment
    
    
    4
    
    
    
    42Purchase of intangibles
    
    
    (265
    )
    
    
    (60
    )Acquisition earnout payments
    
    
    (971
    )
    
    
    (1,494
    )Purchases of short-term investments
    
    
    
    
    
    
    (3,000
    )Proceeds from sales of short-term investments
    
    
    4,000
    
    
    
    2,000Net cash provided by (used for) investing activities
    
    
    600
    
    
    
    (5,082
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of debt obligations
    
    
    (29
    )
    
    
    (790
    )Dividends paid
    
    
    (11,461
    )
    
    
    (8,091
    )Proceeds and tax benefits from exercise of stock options
    
    
    2,017
    
    
    
    1,168Net cash used for financing activities
    
    
    (9,473
    )
    
    
    (7,713
    )Effect of Exchange Rate Changes on Cash and Equivalents
    
    
    104
    
    
    
    (8
    )Net Increase in Cash and Equivalents
    
    
    9,658
    
    
    
    1,643Cash and Equivalents at Beginning of Period
    
    
    36,348
    
    
    
    33,085Cash and Equivalents at End of Period
    
    $
    46,006
    
    
    $
    34,728
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MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
 
 Consolidated Balance Sheets (Unaudited)
 (dollars in thousands)
 ASSETS
 June 30,
    
    September 30,2007
    
    2006CURRENT ASSETS:Cash and equivalents
    
    $
    46,006
    
    
    $
    36,348Short term investments
    
    
    
    
    
    
    4,000Accounts receivable, less allowances of $288 and $408
for doubtful accounts
    
    
    18,641
    
    
    
    19,645Inventories
    
    
    18,825
    
    
    
    17,680Prepaid expenses and other current assets
    
    
    2,174
    
    
    
    2,109Deferred income taxes
    
    
    1,141
    
    
    
    1,387Total current assets
    
    
    86,787
    
    
    
    81,169PROPERTY, PLANT AND EQUIPMENT:Land
    
    
    880
    
    
    
    701Buildings and improvements
    
    
    16,832
    
    
    
    15,963Machinery, equipment and furniture
    
    
    24,197
    
    
    
    22,902Construction in progress
    
    
    647
    
    
    
    870Subtotal
    
    
    42,556
    
    
    
    40,436Less: accumulated depreciation and amortization
    
    
    24,620
    
    
    
    22,629Net property, plant and equipment
    
    
    17,936
    
    
    
    17,807OTHER ASSETS:Goodwill
    
    
    9,898
    
    
    
    9,864Other intangible assets, net
    
    
    9,862
    
    
    
    10,816Restricted cash
    
    
    1,000
    
    
    
    1,000Other assets
    
    
    185
    
    
    
    299Total other assets
    
    
    20,945
    
    
    
    21,979TOTAL ASSETS
    
    $
    125,668
    
    
    $
    120,955
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MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(dollars in thousands)
 LIABILITIES AND SHAREHOLDERS EQUITY
 June 30,
    
    September 30,2007
    
    2006CURRENT LIABILITIES:Accounts payable
    
    $
    3,018
    
    
    $
    3,671Accrued payroll costs
    
    
    4,953
    
    
    
    7,896Purchase business combination liabilities
    
    
    
    
    
    
    937Other accrued expenses
    
    
    4,479
    
    
    
    3,955Income taxes payable
    
    
    942
    
    
    
    4,158Total current liabilities
    
    
    13,392
    
    
    
    20,617CONVERTIBLE SUBORDINATED DEBENTURES
    
    
    
    
    
    
    1,803DEFERRED INCOME TAXES
    
    
    3,463
    
    
    
    3,758COMMITMENTS 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,
39,769,054 and 39,235,777 shares issued, respectively
    
    
    
    
    
    
    Additional paid-in capital
    
    
    79,922
    
    
    
    74,950Retained earnings
    
    
    28,705
    
    
    
    19,917Accumulated other comprehensive income (loss)
    
    
    186
    
    
    
    (90
    )Total shareholders equity
    
    
    108,813
    
    
    
    94,777TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    125,668
    
    
    $
    120,955
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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, 2006
    
    
    39,236
    
    
    $
    74,950
    
    
    $
    19,917
    
    
    $
    (90
    )
    
    $
    
    
    
    $
    94,777Dividends paid
    
    
    
    
    
    
    
    
    
    
    (11,461
    )
    
    
    
    
    
    
    
    
    
    
    (11,461
    )Exercise of stock options, net of tax
    
    
    258
    
    
    
    2,064
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,064Stock based compensation
    
    
    
    
    
    
    1,231
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,231Bond conversion
    
    
    275
    
    
    
    1,677
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,677Comprehensive income:Net earnings
    
    
    
    
    
    
    
    
    
    
    20,249
    
    
    
    
    
    
    
    20,249
    
    
    
    20,249Hedging activity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28
    )
    
    
    (28
    )
    
    
    (28
    )Other comprehensive income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (151
    )
    
    
    (151
    )
    
    
    (151
    )Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    455
    
    
    
    455
    
    
    
    455Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    20,525Balance at June 30, 2007
    
    
    39,769
    
    
    $
    79,922
    
    
    $
    28,705
    
    
    $
    186
    
    
    
    
    
    
    $
    108,813
 
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MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES
 
 Notes to Consolidated Financial Statements
 (Unaudited)
 1. Basis of Presentation:
     2.
    
    Significant Accounting Policies:
 (a)
    
    Revenue Recognition Meridians revenues are derived primarily from product sales. Revenue is generally
recognized when product is shipped and title has passed to the buyer. Revenue for the US
Diagnostics operating segment is reduced at the date of sale for estimated rebates that will
be claimed by customers. Rebate agreements are in place with certain independent national
distributors and are designed to reimburse such distributors for their cost in handling
Meridians products. Management estimates rebate accruals based on historical statistics,
current trends, and other factors. Changes to these rebate accruals are recorded in the
period that they become known.Life Science operating segment revenue for contract services may come from standalone
arrangements for process development and/or optimization work (contract research and
development services) or custom manufacturing, or multiple-deliverable arrangements that
include process development work followed by larger-scale manufacturing (both contract
research and development services and contract manufacturing services). Revenue is
recognized based on the nature of the arrangements, using the principles in EITF 00-21,
Revenue Arrangements with Multiple Deliverables. The framework in EITF 00-21 is based on
each of the multiple deliverables in a given arrangement having distinct and separate fair
values. Fair values are determined via consistent pricing between standalone arrangements
and multiple deliverable arrangements, as well as a competitive bidding process. Contract
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research and development services may be performed on a time and materials basis or fixed
fee
basis. For time and materials arrangements, revenue is recognized as services are
performed and billed. For fixed fee arrangements, revenue is recognized upon completion
and acceptance by the customer. For contract manufacturing services, revenue is recognized
upon delivery of product and acceptance by the customer.(b)
    
    Comprehensive Income Comprehensive income represents the net change in shareholders equity during a period from
sources other than transactions with shareholders. Meridians comprehensive income is
comprised of net earnings, foreign currency translation, and changes in the fair value of
forward exchange contracts accounted for as cash flow hedges.Assets and liabilities of foreign operations are translated using period-end exchange rates
with gains or losses resulting from translation included in accumulated other comprehensive
income (loss). Revenues and expenses are translated using exchange rates prevailing during
the period. Meridian also recognizes foreign currency transaction gains and losses on
certain assets and liabilities that are denominated in the Euro currency. These gains and
losses are included in other income and expense in the accompanying consolidated statements
of operations.Comprehensive income for the interim periods ended June 30 was as follows (in thousands):
 Three Months
    
    Nine MonthsEnded June 30,
    
    Ended June 30,2007
    
    2006
    
    2007
    
    2006Net earnings
    
    $
    8,804
    
    
    $
    4,862
    
    
    $
    20,249
    
    
    $
    13,547Hedging activity
    
    
    5
    
    
    
    (28
    )
    
    
    (28
    )
    
    
    (28
    )Income taxes
    
    
    (34
    )
    
    
    (72
    )
    
    
    (151
    )
    
    
    (115
    )Foreign currency translation adjustment
    
    
    91
    
    
    
    287
    
    
    
    455
    
    
    
    443Comprehensive income
    
    $
    8,866
    
    
    $
    5,049
    
    
    $
    20,525
    
    
    $
    13,847
 (c)      Income Taxes The provision for income taxes includes federal, foreign, state, and local income taxes
currently payable and those deferred because of temporary differences between income for
financial reporting and income for tax purposes. Meridian prepares estimates of permanent
and temporary differences between income for financial reporting purposes and income for tax
purposes. These differences are adjusted to actual upon filing of Meridians tax returns,
which typically occurs in the third and fourth quarters of the current fiscal year for the
preceding fiscal years estimates.From time to time, Meridians tax returns in federal, state, and foreign jurisdictions are
examined by the applicable tax authorities. Meridians tax provisions take into
consideration the judgmental nature of certain tax positions through the establishment of
reserves for differences between the probable tax determinations and the as filed tax
positions of certain assets and liabilities. Meridian believes that the results of any tax
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authority examinations would not have a significant adverse impact on financial condition or
results of operations.In fiscal 2000, Meridian recorded a tax benefit related to the insolvency of a foreign
subsidiary that has since been liquidated and dissolved. At that time, a reserve was also
provided for future resolution of uncertainties related to this matter. During June 2007,
the statute of limitations expired on the tax returns affected by this matter, and
consequently, the adjustment to tax reserves resulted in a tax benefit of $2,425,000. This
tax benefit reduced the effective tax rate by 25 points and 9 points, respectively, for the
three and nine-month periods ended June 30, 2007.(d)
    
    Stock-based Compensation Meridian accounts for stock-based compensation pursuant to SFAS No. 123R, Share-Based
Payment. SFAS No. 123R requires recognition of compensation expense for all share-based
awards made to employees and outside directors, based upon the fair value of the share-based
award on the date of the grant.(e)
    
    Cash Equivalents Meridian considers short-term investments with original maturities of 90 days or less to be
cash equivalents. Auction-rate securities are separately classified as short-term
investments in the consolidated financial statements.(f)
    
    Short-term Investments Auction rate securities are classified as short-term investments in the consolidated
financial statements and are accounted for as available-for-sale securities under SFAS No.
115, Accounting for Certain Investments in Debt and Equity Securities. As such, unrealized
holding gains and losses are reported as a component of other comprehensive income until
realized. The carrying value of these securities was equal to their fair value as of
September 30, 2006. Meridian did not own any auction rate securities as of June 30, 2007.(g)
    
    Derivative Financial Instruments Meridian accounts for its foreign currency forward exchange contracts in accordance with
SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended.
These instruments are designated as cash flow hedges, and therefore, the effective portion
of the net gain or loss on the derivative instrument is reported as a component of other
comprehensive income and reclassified into earnings in the same period or periods during
which the hedged transaction affects earnings. For the ineffective portion of the hedge,
gains or losses are charged to earnings in the current period. All derivative instruments
are recognized as either assets or liabilities at fair value in the consolidated balance
sheets. See Note 7.
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(h)
    
    Reclassifications Certain reclassifications have been made to the prior period financial statements to conform
to the current year presentation.
 3.
    
    Inventories:
  June 30,
    
    September 30,2007
    
    2006Raw materials
    
    $
    4,693
    
    
    $
    3,973Work-in-process
    
    
    5,721
    
    
    
    5,139Finished goods
    
    
    8,411
    
    
    
    8,568$
    18,825
    
    
    $
    17,680
 4.
    
    Segment Information:
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US
    
    
    European
    
    
    LifeDiagnostics
    
    
    Diagnostics
    
    
    Science
    
    
    Eliminations(1)
    
    
    TotalThree Months  2007Net sales -Third-party
    
    $
    17,065
    
    
    $
    6,279
    
    
    $
    6,419
    
    
    $
    
    
    
    $
    29,763Inter-segment
    
    
    2,619
    
    
    
    
    
    
    
    117
    
    
    
    (2,736
    )
    
    
    Operating income
    
    
    6,935
    
    
    
    1,424
    
    
    
    1,282
    
    
    
    (168
    )
    
    
    9,473Total assets (June 30, 2007)
    
    
    107,538
    
    
    
    14,949
    
    
    
    43,372
    
    
    
    (40,191
    )
    
    
    125,668Three Months  2006Net sales -Third-party
    
    $
    15,533
    
    
    $
    5,287
    
    
    $
    5,763
    
    
    $
    
    
    
    $
    26,583Inter-segment
    
    
    1,785
    
    
    
    
    
    
    
    141
    
    
    
    (1,926
    )
    
    
    Operating income
    
    
    5,240
    
    
    
    1,021
    
    
    
    686
    
    
    
    (54
    )
    
    
    6,893Total assets (September 30,
2006)
    
    
    109,678
    
    
    
    12,716
    
    
    
    42,178
    
    
    
    (43,617
    )
    
    
    120,955Nine Months  2007Net sales -Third-party
    
    $
    55,885
    
    
    $
    17,808
    
    
    $
    16,884
    
    
    $
    
    
    
    $
    90,577Inter-segment
    
    
    6,880
    
    
    
    
    
    
    
    475
    
    
    
    (7,355
    )
    
    
    Operating income
    
    
    20,930
    
    
    
    3,516
    
    
    
    2,149
    
    
    
    (245
    )
    
    
    26,350Nine Months  2006Net sales -Third-party
    
    $
    48,539
    
    
    $
    14,841
    
    
    $
    16,383
    
    
    $
    
    
    
    $
    79,763Inter-segment
    
    
    5,412
    
    
    
    
    
    
    
    563
    
    
    
    (5,975
    )
    
    
    Operating income
    
    
    15,058
    
    
    
    2,560
    
    
    
    2,491
    
    
    
    (69
    )
    
    
    20,040
 (1)
    
    Eliminations consist of intersegment transactions.
  5.
    
    Intangible Assets:
  WtdAvg
    
    June 30, 2007
    
    September 30, 2006Amort
    
    Gross
    
    
    
    
    
    GrossPeriod
    
    Carrying
    
    Accumulated
    
    Carrying
    
    Accumulated(Yrs)
    
    Value
    
    Amortization
    
    Value
    
    AmortizationCore products and cell lines
    
    
    15
    
    
    $
    4,698
    
    
    $
    2,240
    
    
    $
    4,698
    
    
    $
    2,023Manufacturing technologies
    
    
    15
    
    
    
    5,907
    
    
    
    3,999
    
    
    
    5,907
    
    
    
    3,743Trademarks, licenses and patents
    
    
    12
    
    
    
    2,270
    
    
    
    1,660
    
    
    
    2,005
    
    
    
    1,545Customer lists and supply agreements
    
    
    13
    
    
    
    10,636
    
    
    
    5,750
    
    
    
    10,633
    
    
    
    5,116$
    23,511
    
    
    $
    13,649
    
    
    $
    23,243
    
    
    $
    12,427
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6. Debenture Conversion and Redemption Transactions:
   7. Hedging Transactions:
    Notional
    
    Contract
    
    Estimated Fair
    
    AverageAmount
    
    Value
    
    Value
    
    Exchange Rate
    
    Maturity
    750
    
    
    $
    997
    
    
    $
    1,017
    
    
    
    1.3288
    
    
    FY 2007
    3,600
    
    
    $
    4,915
    
    
    $
    4,906
    
    
    
    1.3652
    
    
    FY 2008
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8.
    
    Stock Split:
  
  Refer to Forward Looking Statements following the Index in front of this Form 10-Q.
 Third Quarter and Nine-Month Results:
    Three Months June 30,
    
    Nine Months June 30,2007
    
    2006
    
    2007
    
    2006Net Earnings -US GAAP basis
    
    $
    8,804
    
    
    $
    4,862
    
    
    $
    20,249
    
    
    $
    13,547Tax benefit not expected to recur in the future
    
    
    (2,425
    )
    
    
    
    
    
    
    (2,425
    )
    
    
    Excluding tax benefit
    
    $
    6,379
    
    
    $
    4,862
    
    
    $
    17,824
    
    
    $
    13,547
 Three Months June 30,
    
    Nine Months June 30,2007
    
    2006
    
    2007
    
    2006Net Earnings per Basic Common Share -US GAAP basis
    
    $
    0.22
    
    
    $
    0.12
    
    
    $
    0.51
    
    
    $
    0.35Tax benefit not expected to recur in the future
    
    
    (0.06
    )
    
    
    
    
    
    
    (0.06
    )
    
    
    Excluding tax benefit
    
    $
    0.16
    
    
    $
    0.12
    
    
    $
    0.45
    
    
    $
    0.35
 Three Months June 30,
    
    Nine Months June 30,2007
    
    2006
    
    2007
    
    2006Net Earnings per Diluted Common Share -US GAAP basis
    
    $
    0.22
    
    
    $
    0.12
    
    
    $
    0.50
    
    
    $
    0.34Tax benefit not expected to recur in the future
    
    
    (0.06
    )
    
    
    
    
    
    
    (0.06
    )
    
    
    Excluding tax benefit
    
    $
    0.16
    
    
    $
    0.12
    
    
    $
    0.44
    
    
    $
    0.35
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Operating Segments:
   Results of Operations:
 Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006
 Net sales
  C. difficile Card ® H. pylori C difficile Card © TM H. pylori TM
 C. difficile Card ®
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Gross Profit
   Operating Expenses
     Page 16 of 23




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Operating Income
  Other Income and Expense
  Income Taxes
   Nine Months Ended June 30, 2007 Compared to Nine Months Ended June 30, 2006
 Net sales
  C. difficile H. pylori
 Page 17 of 23




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Card ® C. difficile Card © TM H. pylori TM
 C. difficile H. pylori
   Gross Profit
   Operating Expenses
   Page 18 of 23




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Operating Income
  Other Income and Expense
  Page 19 of 23




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Income Taxes
  Liquidity and Capital Resources:
 Comparative Cash Flow Analysis
      Capital Resources
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Page 21 of 23




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PART II. OTHER INFORMATION
 
   
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MERIDIAN BIOSCIENCE, INC.Date: August 7, 2007
    
    /s/ Melissa LuekeMelissa LuekeVice President and Chief Financial Officer
 Page 23 of 23