10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2014

OR

¨ 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.)

3471 River Hills Drive

Cincinnati, Ohio 45244

(513) 271-3700

Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding April 30, 2014
Common Stock, no par value	41,555,911

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES

TABLE OF CONTENTS TO QUARTERLY REPORT ON FORM 10-Q

	Page(s)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Statements of Operations Three and Six Months Ended March 31, 2014 and 2013		1
Condensed Consolidated Statements of Comprehensive Income Three and Six Months Ended March 31, 2014 and 2013		2
Condensed Consolidated Statements of Cash Flows Six Months Ended March 31, 2014 and 2013		3
Condensed Consolidated Balance Sheets March 31, 2014 and September 30, 2013		4-5
Condensed Consolidated Statement of Changes in Shareholders’ Equity Six Months Ended March 31, 2014		6
Notes to Condensed Consolidated Financial Statements		7-12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		12-20
Item 3. Quantitative and Qualitative Disclosures About Market Risk		20
Item 4. Controls and Procedures		20
PART II. OTHER INFORMATION
Item 1A. Risk Factors		21
Item 6. Exhibits		21
Signature		22

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. 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 within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, 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 or revise any forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. 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, and its ability to effectively sell such products. 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. Meridian relies on proprietary, patented and licensed technologies, and the Company’s ability to protect its intellectual property rights, as well as the potential for intellectual property litigation, would impact its results. Ongoing consolidations of reference laboratories and formation of multi-hospital alliances may cause adverse changes to pricing and distribution. Recessionary pressures on the economy and the markets in which our customers operate, as well as adverse trends in buying patterns from customers can change expected results. Costs and difficulties in complying with laws and regulations, including those 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. The international scope of Meridian’s operations, including changes in the relative strength or weakness of the U.S. dollar and general economic conditions in foreign countries, can impact results and make them difficult to predict. One of Meridian’s 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 will be successfully integrated into Meridian’s operations. There may be risks that acquisitions may disrupt operations and may pose potential difficulties in employee retention and there may be additional risks with respect to Meridian’s ability to recognize the benefits of acquisitions, including potential synergies and cost savings or the failure of acquisitions to achieve their plans and objectives. The Company cannot predict the possible impact of U.S. healthcare legislation enacted in 2010 – the Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act – and any modification or repeal of any of the provisions thereof, and any similar initiatives in other countries on its results of operations. In addition to the factors described in this paragraph, Part I, Item 1A Risk Factors of our Form 10-K contains a list and description of uncertainties, risks and other matters that may affect the Company.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

	Three Months Ended					Six Months Ended
	March 31,					March 31,
	2014			2013		2014			2013
NET REVENUES	$	50,134		$	47,265	$	94,928		$	92,616
COST OF SALES		18,541			16,522		35,328			33,077
GROSS PROFIT		31,593			30,743		59,600			59,539
OPERATING EXPENSES
Research and development		3,186			2,811		6,039			5,328
Selling and marketing		6,461			5,471		12,538			11,164
General and administrative		6,280			7,208		13,731			14,703
Total operating expenses		15,927			15,490		32,308			31,195
OPERATING INCOME		15,666			15,253		27,292			28,344
OTHER INCOME (EXPENSE)
Interest income		6			19		10			26
Other, net		(28	)		257		(248	)		385
Total other income (expense)		(22	)		276		(238	)		411
EARNINGS BEFORE INCOME TAXES		15,644			15,529		27,054			28,755
INCOME TAX PROVISION		5,344			5,280		9,328			10,032
NET EARNINGS	$	10,300		$	10,249	$	17,726		$	18,723
BASIC EARNINGS PER COMMON SHARE	$	0.25		$	0.25	$	0.43		$	0.45
DILUTED EARNINGS PER COMMON SHARE	$	0.24		$	0.24	$	0.42		$	0.45
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC		41,471			41,266		41,434			41,188
EFFECT OF DILUTIVE STOCK OPTIONS AND RESTRICTED SHARES AND UNITS		676			681		686			642
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED		42,147			41,947		42,120			41,830
ANTI-DILUTIVE SECURITIES:
Common share options and restricted shares and units		168			262		137			295
DIVIDENDS DECLARED PER COMMON SHARE	$	0.20		$	—	$	0.39		$	0.38

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 1

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)

	Three Months Ended March 31,					Six Months Ended March 31,
	2014		2013			2014		2013
NET EARNINGS	$	10,300	$	10,249		$	17,726	$	18,723
Foreign currency translation adjustment		337		(1,217	)		1,060		(971	)
COMPREHENSIVE INCOME	$	10,637	$	9,032		$	18,786	$	17,752

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 2

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

Six Months Ended March 31,	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$	17,726		$	18,723
Non-cash items included in net earnings:
Depreciation of property, plant and equipment		1,756			1,666
Amortization of intangible assets		1,042			1,165
Amortization of deferred illumigene instrument costs		864			746
Stock-based compensation		2,157			1,573
Deferred income taxes		(31	)		(278	)
Loss on disposition and write-down of fixed assets and other assets		—			10
Change in current assets		(6,656	)		477
Change in current liabilities		(3,143	)		(1,116	)
Other, net		(159	)		(586	)
Net cash provided by operating activities		13,556			22,380
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment		(2,573	)		(1,408	)
Purchases of intangible assets		(1,677	)		(20	)
Net cash used for investing activities		(4,250	)		(1,428	)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid		(16,169	)		(15,652	)
Proceeds and tax benefits from exercises of stock options		540			2,055
Net cash used for financing activities		(15,629	)		(13,597	)
Effect of Exchange Rate Changes on Cash and Equivalents		254			(354	)
Net (Decrease) Increase in Cash and Equivalents		(6,069	)		7,001
Cash and Equivalents at Beginning of Period		44,282			31,593
Cash and Equivalents at End of Period	$	38,213		$	38,594

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 3

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

ASSETS

	March 31,		September 30,
	2014		2013
	(Unaudited)
CURRENT ASSETS
Cash and equivalents	$	38,213	$	44,282
Accounts receivable, less allowances of $206 and $233		26,799		26,183
Inventories		38,133		34,835
Prepaid expenses and other current assets		6,454		4,643
Deferred income taxes		4,352		4,145
Total current assets		113,951		114,088
PROPERTY, PLANT AND EQUIPMENT, at Cost
Land		1,186		1,183
Buildings and improvements		26,900		26,848
Machinery, equipment and furniture		39,315		38,502
Construction in progress		2,190		554
Subtotal		69,591		67,087
Less: accumulated depreciation and amortization		42,702		40,996
Net property, plant and equipment		26,889		26,091
OTHER ASSETS
Goodwill		23,507		23,115
Other intangible assets, net		8,841		8,057
Restricted cash		1,000		1,000
Deferred illumigene instrument costs, net		2,719		3,270
Deferred income taxes		930		823
Other assets		318		304
Total other assets		37,315		36,569
TOTAL ASSETS	$	178,155	$	176,748

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 4

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(dollars in thousands)

LIABILITIES AND SHAREHOLDERS’ EQUITY

	March 31,		September 30,
	2014		2013
	(Unaudited)
CURRENT LIABILITIES
Accounts payable	$	7,829	$	5,592
Accrued employee compensation costs		3,586		9,670
Other accrued expenses		5,570		5,462
Income taxes payable		838		979
Total current liabilities		17,823		21,703
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, 41,555,653 and 41,517,839 shares issued, respectively		—		—
Additional paid-in capital		110,082		107,412
Retained earnings		48,445		46,888
Accumulated other comprehensive income		1,805		745
Total shareholders’ equity		160,332		155,045
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	178,155	$	176,748

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 5

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Changes in Shareholders’ Equity (Unaudited)

(dollars and shares in thousands)

	Common Shares Issued		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balance at September 30, 2013		41,518	$	107,412	$	46,888		$	745	$	155,045
Cash dividends paid		—		—		(16,169	)		—		(16,169	)
Exercise of stock options		36		513		—			—		513
Conversion of restricted stock units		2		—		—			—		—
Stock compensation expense		—		2,157		—			—		2,157
Net earnings		—		—		17,726			—		17,726
Foreign currency translation adjustment		—		—		—			1,060		1,060
Balance at March 31, 2014		41,556	$	110,082	$	48,445		$	1,805	$	160,332

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 6

MERIDIAN BIOSCIENCE, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Dollars in Thousands, Except Per Share Amounts

(Unaudited)

1. Basis of Presentation

The interim condensed consolidated financial statements are unaudited and are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, and the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the interim financial statements include all normal adjustments and disclosures necessary to present fairly the Company’s financial position as of March 31, 2014, the results of its operations for the three and six month periods ended March 31, 2014 and 2013, and its cash flows for the six month periods ended March 31, 2014 and 2013. These statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s fiscal 2013 Annual Report on Form 10-K. Financial information as of September 30, 2013 has been derived from the Company’s audited consolidated financial statements.

The results of operations for interim periods are not necessarily indicative of the results to be expected for the year.

2. Significant Accounting Policies

(a) Revenue Recognition and Accounts Receivable –

Revenue is generally recognized from sales when product is shipped and title has passed to the customer. Revenue for the Diagnostics segment is reduced at the date of sale for product price adjustments due certain distributors under local contracts. Management estimates accruals for distributor price adjustments based on local contract terms, sales data provided by distributors, estimates of inventories of our products held by distributors, historical statistics, current trends, and other factors. Changes to the accruals are recorded in the period that they become known. Such accruals were $4,207 at March 31, 2014 and $3,866 at September 30, 2013, and have been netted against accounts receivable.

Revenue for our Diagnostics segment includes revenue for our illumigene^® molecular test system. This system includes an instrument, instrument accessories and test kits. In markets where the test system is sold via multiple deliverable arrangements (i.e., the United States, Australia, Belgium, France, Holland and Italy), the cost of the instrument and instrument accessories are deferred upon placement at a customer and amortized on a straight-line basis into cost of sales over the expected utilization period, generally three years.

We evaluate whether each deliverable in the arrangement is a separate unit of accounting. The significant deliverables are an instrument, instrument accessories (e.g., printer) and test kits. An instrument and instrument accessories are delivered to the customer prior to the start of the customer utilization period, in order to accommodate customer set-up and installation. There is de minimis consideration received from the customer at the time of instrument placement. We have determined that the instrument and instrument accessories are not a separate unit of accounting because such equipment can only be used to process and read the results from our illumigene diagnostic tests (i.e., our instrument and test kits function together to deliver a diagnostic test result), and therefore the instrument and instrument accessories do not have standalone value to the customer. Consequently, there is no revenue allocated to the placement of the instrument and instrument accessories. Test kits are delivered to the customer over the utilization period of the instrument, which we estimate has a useful life of three years. Our average customer contract period, including estimated renewals, is at least equal to the estimated three-year utilization period. Revenue for the sale of test kits is recognized upon shipment and transfer of title to the customers.

Page 7

In markets where the test system is not sold via multiple deliverable arrangements (i.e., countries other than the United States, Australia, Belgium, France, Holland and Italy), the cost of the instrument and instrument accessories is charged to cost of sales at the time of shipment and transfer of title to the customer. Revenue for the sales of instruments and instrument accessories and test kits is recognized upon shipment and transfer of title to the customers. In these markets, our illumigene molecular test system is sold to independent distributors who inventory the instruments, instrument accessories and test kits for resale to end-users.

Our products are generally not subject to a customer right of return except for product recall events under the rules and regulations of the Food and Drug Administration or equivalent agencies outside the United States. In this circumstance, the costs to replace affected products would be accrued at the time a loss was probable and estimable.

Life Science revenue for contract services may come from research and development services or manufacturing services, including process development work, or a combination of both. Revenue is recognized based on each of the deliverables in a given arrangement having distinct and separate customer pricing. Depending on the nature of the arrangement, revenue is recognized as services are performed and billed, upon completion and acceptance by the customer, or upon delivery of product and acceptance by the customer.

Trade accounts receivable are recorded in the accompanying Condensed Consolidated Balance Sheets at invoiced amounts less provisions for distributor price adjustments under local contracts and doubtful accounts. The allowance for doubtful accounts represents our estimate of probable credit losses and is based on historical write-off experience. The allowance for doubtful accounts and related metrics, such as days’ sales outstanding, are reviewed monthly. Accounts with past due balances over 90 days are reviewed individually for collectibility. Customer invoices are charged off against the allowance when we believe it is probable that the invoices will not be paid.

(b) Comprehensive Income (Loss) –

As reflected in the accompanying Condensed Consolidated Statements of Comprehensive Income, our comprehensive income or loss is comprised of net earnings and foreign currency translation.

Assets and liabilities of foreign operations are translated using period-end exchange rates with gains or losses resulting from translation included as a separate component of comprehensive income or loss. Revenues and expenses are translated using exchange rates prevailing during the period. We also recognize foreign currency transaction gains and losses on certain assets and liabilities that are denominated in non-functional currencies. These gains and losses are included in other income and expense in the accompanying Condensed Consolidated Statements of Operations.

(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. We prepare 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 our tax returns, typically occurring in the third and fourth quarters of the current fiscal year for the preceding fiscal year’s estimates.

We account for uncertain tax positions using a benefit recognition model with a two-step approach: (i) a more-likely-than-not recognition criterion; and (ii) a measurement attribute that measures the position as the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement. If it is not more likely than not that the benefit will be sustained on its technical merits, no benefit is recorded. We recognize accrued interest and penalties related to unrecognized tax benefits as a portion of our income tax provision in the Condensed Consolidated Statements of Operations.

Page 8

In September 2013, the Internal Revenue Service issued Treasury Decision 9636, which enacted final tax regulations regarding the capitalization and expensing of amounts paid to acquire, produce, or improve tangible property. The regulations also include guidance regarding the retirement of depreciable property. The regulations are required to be effective in taxable years beginning on or after January 1, 2014, although taxpayers may choose to apply them in taxable years beginning on or after January 1, 2012. The Company is currently assessing the impact of the final regulations on its financial statements.

(d) Stock-based Compensation –

We recognize compensation expense for all share-based awards made to employees, based upon the fair value of the share-based award on the date of the grant. Awards are expensed over their requisite service periods.

(e) Cash and Cash Equivalents –

Cash and cash equivalents include the following components:

	March 31, 2014				September 30, 2013
	Cash and Equivalents		Other		Cash and Equivalents		Other
Overnight repurchase agreements	$	23,791	$	—	$	32,103	$	—
Cash on hand -
Restricted		—		1,000		—		1,000
Unrestricted		14,422		—		12,179		—
Total	$	38,213	$	1,000	$	44,282	$	1,000

(f) Reclassifications –

Certain reclassifications have been made to the prior period financial statements to conform to the current fiscal period presentation. Such reclassifications had no impact on net earnings or shareholders’ equity.

3. Inventories

Inventories are comprised of the following:

	March 31, 2014		September 30, 2013
Raw materials	$	6,591	$	7,170
Work-in-process		5,989		8,585
Finished goods - illumigene instruments		2,694		1,980
Finished goods - kits and reagents		22,859		17,100
Total	$	38,133	$	34,835

Page 9

4. Reportable Segment and Major Customers Information

Meridian was formed in 1976 and functions as a fully-integrated research, development, manufacturing, marketing and sales organization with primary emphasis in the fields of in vitro diagnostics and life science. Our principal businesses are (i) the development, manufacture and distribution of diagnostic test kits primarily for gastrointestinal, viral, respiratory and parasitic infectious diseases; and (ii) the manufacture and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells and bioresearch reagents used by researchers and other diagnostic manufacturers, and the contract development and manufacture of proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.

In the fourth quarter of fiscal 2013, we aggregated our Diagnostics operating segments into a single reportable segment, thereby resulting in our reportable segments being Diagnostics and Life Science. The prior period information reflected herein has been conformed to the current period presentation.

The Diagnostics segment is headquartered in Cincinnati, Ohio, which also serves as the base of manufacturing operations and research and development. The Diagnostics segment has sales and distribution facilities in the United States, Europe and Australia. The Life Science segment consists of manufacturing operations in Memphis, Tennessee; Boca Raton, Florida; London, England; Luckenwalde, Germany; and Sydney, Australia, and the sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells and bioresearch reagents domestically and abroad, including a sales and business development location in Singapore. The Life Science segment also includes the contract development and manufacture of cGMP clinical grade proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.

Amounts due from two Diagnostics distributor customers accounted for 15% and 17% of consolidated accounts receivable at March 31, 2014 and September 30, 2013, respectively. Revenue from these two distributor customers accounted for 35% and 42% of the Diagnostics segment third-party revenue during the three months ended March 31, 2014 and 2013, respectively, and 36% and 44% during the six months ended March 31, 2014 and 2013, respectively. In addition, approximately $3,500 of our accounts receivable at both March 31, 2014 and September 30, 2013 is due from Italian hospital customers whose funding ultimately comes from the Italian government, representing 13% of consolidated accounts receivable in each of the respective periods.

Within our Life Science segment, two diagnostic manufacturing customers accounted for 23% and 18% of the segment’s third-party revenue during the three months ended March 31, 2014 and 2013, respectively, and 17% and 18% during the six months ended March 31, 2014 and 2013, respectively.

Page 10

Segment information for the interim periods is as follows:

	Diagnostics		Life Science		Eliminations(1)			Total
Three Months Ended March 31, 2014
Net revenues -
Third-party	$	37,061	$	13,073	$	—		$	50,134
Inter-segment		154		225		(379	)		—
Operating income		12,301		3,306		59			15,666
Goodwill (March 31, 2014)		1,250		22,257		—			23,507
Other intangible assets, net (March 31, 2014)		2,968		5,873		—			8,841
Total assets (March 31, 2014)		111,319		115,444		(48,608	)		178,155
Three Months Ended March 31, 2013
Net revenues -
Third-party	$	36,403	$	10,862	$	—		$	47,265
Inter-segment		105		350		(455	)		—
Operating income		12,494		3,046		(287	)		15,253
Goodwill (September 30, 2013)		1,250		21,865		—			23,115
Other intangible assets, net (September 30, 2013)		1,561		6,496		—			8,057
Total assets (September 30, 2013)		112,054		110,111		(45,417	)		176,748
Six Months Ended March 31, 2014
Net revenues -
Third-party	$	71,898	$	23,030	$	—		$	94,928
Inter-segment		263		484		(747	)		—
Operating income		21,685		5,567		40			27,292
Six Months Ended March 31, 2013
Net revenues -
Third-party	$	72,072	$	20,544	$	—		$	92,616
Inter-segment		203		508		(711	)		—
Operating income		23,834		4,680		(170	)		28,344

(1) Eliminations consist of inter-segment transactions.

Transactions between segments are accounted for at established intercompany prices for internal and management purposes, with all intercompany amounts eliminated in consolidation.

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5. Intangible Assets

A summary of our acquired intangible assets subject to amortization, as of March 31, 2014 and September 30, 2013 is as follows:

	March 31, 2014				September 30, 2013
	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Manufacturing technologies, core products and cell lines	$	11,723	$	10,375	$	11,676	$	10,097
Trademarks, licenses and patents		6,474		2,481		4,748		2,130
Customer lists and supply agreements		12,481		8,981		12,353		8,493
	$	30,678	$	21,837	$	28,777	$	20,720

During the first quarter of fiscal 2014, we acquired the remaining licensing rights related to our illumigene molecular technology for $1,638. These rights are being amortized over a weighted average period of approximately 8.5 years.

The actual aggregate amortization expense for these intangible assets was $516 and $585 for the three months ended March 31, 2014 and 2013, respectively, and $1,042 and $1,165 for the six months ended March 31, 2014 and 2013, respectively. The estimated aggregate amortization expense for these intangible assets for each of the fiscal years through fiscal 2019 is as follows: remainder of fiscal 2014 – $967, fiscal 2015 – $1,777, fiscal 2016 – $1,432, fiscal 2017 – $1,163, fiscal 2018 – $1,140 and fiscal 2019 – $1,099.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Refer to “Forward Looking Statements” following the Table of Contents in front of this Form 10-Q. In the discussion that follows, all dollar amounts are in thousands (both tables and text), except per share data.

Following is a discussion and analysis of the financial statements and other statistical data that management believes will enhance the understanding of Meridian’s financial condition, changes in financial condition and results of operations. This discussion should be read in conjunction with the financial statements and notes thereto beginning on page 1.

Results of Operations

Three Months Ended March 31, 2014

Net earnings for the second quarter of fiscal 2014 increased less than 1% to $10,300, or $0.24 per diluted share, from net earnings for the second quarter of fiscal 2013 of $10,249, or $0.24 per diluted share. This increase reflects the combined effects of increased revenues, slightly decreased gross profit margins and modestly increased operating expenses. Consolidated revenues increased 6% to $50,134 for the second quarter of fiscal 2014 compared to the same period of the prior year.

Included within the second quarter 2014 results were revenues from our illumigene^® molecular platform of products totaling $9,853, representing a 23% increase over the fiscal 2013 second quarter. Also contributing to the consolidated revenue increase were increased revenues in our H. pylori focus product family, as well as in both of our Life Science segment’s product lines (i.e., molecular component and immunoassay component). Serving to partially offset these revenue increases were decreased revenues in our largest diagnostic focus product family (C. difficile) and our respiratory product family.

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Revenues for the Diagnostics segment for the second quarter of fiscal 2014 increased 2% compared to the second quarter of fiscal 2013, reflecting the following for each of our focus product families: 6% decline in our C. difficile products, 11% growth in our H. pylori products, and 1% growth in our foodborne products. In addition, we experienced an 8% decline in revenues from our respiratory products, which include both molecular and immunoassay products, compared to the prior year fiscal second quarter. With 15% growth in its molecular component product sales and 24% growth in its immunoassay component product sales, revenues from our Life Science segment increased by 20% during the second quarter of fiscal 2014 compared to the second quarter of fiscal 2013, reflecting the effect of shipping certain orders during the fiscal 2014 second quarter that were delayed from the fiscal 2014 first quarter.

Six Months Ended March 31, 2014

For the six month period ended March 31, 2014, net earnings decreased 5% to $17,726, or $0.42 per diluted share, from net earnings for the comparable fiscal 2013 period of $18,723, or $0.45 per diluted share. This decrease reflects the combined effects of increased revenues, slightly decreased gross profit margins and modestly increased operating expenses, along with a $450 (pre-tax) negative effect from medical device tax that did not exist during the first quarter of fiscal 2013 (see discussion in Medical Device Tax below). Consolidated revenues increased 2% to $94,928 for the first six months of fiscal 2014 compared to the same period of the prior fiscal year.

Included within the six month year-to-date fiscal 2014 results were revenues from our illumigene molecular platform of products totaling $18,348, representing a 19% increase over the first six months of fiscal 2013. Also contributing to the consolidated revenue increase were increased revenues in our H. pylori focus product family, as well as in both of our Life Science segment’s business lines (i.e., molecular component and immunoassay component). Serving to substantially offset these revenue increases were decreased revenues in our largest diagnostic focus product family (C. difficile) and our respiratory product family.

During the first six months of fiscal 2014, revenues for the Diagnostics segment decreased less than 1% from the comparable fiscal 2013 period, reflecting the following for each of our focus product families: 8% decline in our C. difficile products, 10% growth in our H. pylori products, and 1% growth in our foodborne products. In addition, we experienced a 13% decline in revenues from our respiratory products from the comparable fiscal 2013 period. With 16% growth in its molecular component product sales and 10% growth in its immunoassay component product sales, revenues from our Life Science segment increased by 12% during the six months ended March 31, 2014 over the comparable fiscal 2013 period.

REVENUE OVERVIEW

Below are analyses of the Company’s revenue, provided for each of the following:

- By Reportable Segment & Geographic Region

- By Product Platform/Type

- By Disease Family (Diagnostics only)

Revenue Overview- By Reportable Segment & Geographic Region

Our reportable segments are Diagnostics and Life Science. The Diagnostics segment is headquartered in Cincinnati, Ohio, which also serves as the base of manufacturing operations and research and development. The Diagnostics segment sells diagnostic test kits in the U.S. and Canada (“North America”); Europe, Middle East and Africa (“EMEA”); and other countries outside of North America and EMEA (rest of the world, or “ROW”). The Life Science segment consists of manufacturing operations in Memphis, Tennessee; Boca Raton, Florida; London, England; Luckenwalde, Germany; and Sydney, Australia, and the sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells and bioresearch reagents domestically and abroad, including a sales and business development location in Singapore. The Life Science segment also includes the contract development and manufacture of cGMP clinical grade proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.

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Revenues for the Diagnostics segment, in the normal course of business, may be affected from quarter to quarter by buying patterns of major distributors, seasonality and strength of certain diseases, and foreign currency exchange rates. Revenues for the Life Science segment, in the normal course of business, may be affected from quarter to quarter by the timing and nature of arrangements for contract services work, which may have longer production cycles than bioresearch reagents and bulk antigens and antibodies, as well as buying patterns of major customers, and foreign currency exchange rates. We believe that the overall breadth of our product lines serves to reduce the variability in consolidated revenues.

	Three Months Ended March 31,									Six Months Ended March 31,
	2014			2013			Inc (Dec)			2014			2013			Inc (Dec)
Diagnostics -
North America	$	29,952		$	28,882			4	%	$	57,895		$	57,696			—	%
EMEA		5,919			5,958			(1	)%		11,292			11,087			2	%
ROW		1,190			1,563			(24	)%		2,711			3,289			(18	)%
Total Diagnostics		37,061			36,403			2	%		71,898			72,072			—	%
Life Science -
North America		5,023			4,311			17	%		9,329			8,562			9	%
EMEA		6,199			4,471			39	%		10,009			8,597			16	%
ROW		1,851			2,080			(11	)%		3,692			3,385			9	%
Total Life Science		13,073			10,862			20	%		23,030			20,544			12	%
Consolidated	$	50,134		$	47,265			6	%	$	94,928		$	92,616			2	%
% of total revenues -
Diagnostics		74	%		77	%					76	%		78	%
Life Science		26	%		23	%					24	%		22	%
Total		100	%		100	%					100	%		100	%
Ex-North America		30	%		30	%					29	%		28	%

Revenue Overview- By Product Platform/Type

The revenues generated by each of our reportable segments result primarily from the sale of the following segment-specific categories of products:

Diagnostics

1) Molecular tests that operate on our illumigene platform

2) Immunoassay tests

Life Science

1) Molecular components

2) Immunoassay components

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Revenue for each product platform/type, as well as its relative percentage of segment revenue, is shown below.

	Three Months Ended March 31,									Six Months Ended March 31,
	2014			2013			Inc (Dec)			2014			2013			Inc (Dec)
Diagnostics -
Molecular	$	9,853		$	8,033			23	%	$	18,348		$	15,427			19	%
Immunoassay		27,208			28,370			(4	)%		53,550			56,645			(5	)%
Total Diagnostics	$	37,061		$	36,403			2	%	$	71,898		$	72,072			—	%
Life Science -
Molecular components	$	5,023		$	4,369			15	%	$	9,893		$	8,565			16	%
Immunoassay components		8,050			6,493			24	%		13,137			11,979			10	%
Total Life Science	$	13,073		$	10,862			20	%	$	23,030		$	20,544			12	%
% of Diagnostics revenues -
Molecular		27	%		22	%					26	%		21	%
Immunoassay		73	%		78	%					74	%		79	%
Total Diagnostics		100	%		100	%					100	%		100	%
% of Life Science revenues -
Molecular components		38	%		40	%					43	%		42	%
Immunoassay components		62	%		60	%					57	%		58	%
Total Life Science		100	%		100	%					100	%		100	%

Following is a discussion of the revenues generated by each of these product platforms/types:

Diagnostics Products

illumigene Molecular Platform Products

We have 1,235 customer account placements. Of these account placements, just under 1,100 accounts have completed evaluations and validations and are regularly purchasing product, with the balance of our account placements being in some stage of product evaluation and/or validation. Of our account placements, we have approximately 250 accounts that are regularly purchasing, evaluating and/or validating two or more assays. Upon receiving FDA clearance on March 25, 2014, we launched our Bordetella pertussis molecular diagnostic test in early April – the most recent test available on our illumigene molecular testing platform.

We continue to invest in new product development for our illumigene molecular testing platform, and with the launch of the Bordetella pertussis test, now have five commercialized tests on the platform and three additional tests expected to be available for sale in fiscal 2015:

1. illumigene^® C. difficile – commercialized in August 2010

2. illumigene^® Group B Streptococcus (Group B Strep or GBS) – commercialized in December 2011

3. illumigene^® Group A Streptococcus (Group A Strep) – commercialized in September 2012

4. illumigene^® Mycoplasma (M. pneumonia; walking pneumonia) – commercialized in June 2013

5. illumigene^® Bordetella pertussis (whooping cough) – commercialized in March 2014

6. illumigene^® Chlamydia trachomatis – expected fiscal 2015

7. illumigene^® Neisseria gonorrhea – expected fiscal 2015

8. illumigene^® Herpes Simplex Virus I & II – expected fiscal 2015

Additional illumigene tests in early-stage research or development include enteric parasites such as Giardia, foodborne pathogens such as E. coli, and bloodborne pathogens such as malaria.

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We believe that the diagnostic testing market is continuing to move away from culture and immunoassay testing to molecular testing for diseases where there is a favorable cost/benefit position for the total cost of healthcare. While this market is competitive, with molecular companies such as Cepheid and Becton Dickinson and new entrants such as Quidel, Great Basin, Nanosphere, and others, we believe we are well positioned to capitalize on the migration to molecular testing. Our simple, easy-to-use, illumigene platform, with its expanding menu, requires no expensive equipment purchase and little to no maintenance cost. These features, along with its small footprint and the performance of the illumigene assays, make illumigene an attractive molecular platform to any size hospital.

Immunoassay Products

Revenues from our Diagnostics segment’s immunoassay products decreased 4% in the second quarter of fiscal 2014 and decreased 5% on a six month, year-to-date basis. These decreases result primarily from the decline in revenues from our C. difficile and respiratory products, partially offset by the revenue growth of our H. pylori products, as described below.

Life Science Products

During the second quarter of fiscal 2014, revenues from our Life Science segment increased 20%, with revenues from molecular component sales increasing 15% over the comparable fiscal 2013 quarter and revenues from immunoassay component sales increasing 24%. For the first six months of fiscal 2014, revenues from our Life Science segment increased 12%, with revenues from molecular component sales increasing 16% over the comparable prior year period and revenues from immunoassay component sales increasing 10%. Our molecular component revenues continue to benefit from new product launches and advancements – most notably SensiFAST™ and MyTaq™ PCR components. The fiscal 2014 second quarter revenue level of our bulk immunoassay component business reflects the effect of shipping certain orders during the quarter that were delayed from the fiscal 2014 first quarter, which totaled approximately $1,100.

Diagnostic Revenue Overview- By Disease Family

Revenues from our focus families (C. difficile, foodborne and H. pylori) comprised 59% of our Diagnostics segment’s revenue during both the second quarter of fiscal 2014 and first six months of the fiscal year, compared to 60% during both of the corresponding fiscal 2013 periods. Following is a discussion of the revenues generated by each product family:

C. difficile Products

Revenues for our C. difficile product family declined 6% to $9,300 for the fiscal 2014 second quarter, and declined 8% to $17,900 for the six month, year-to-date period. Revenues for our illumigene product increased 3% and were flat during the three and six month periods ended March 31, 2014, respectively, while revenues for our immunoassay products declined as expected. The C. difficile market has become highly competitive, with over 10 suppliers in the United States. Certain of these suppliers choose to compete solely on price. We believe that two factors will help us respond to these challenging market conditions. First, our marketing programs emphasize that we are the only company that can offer a full range of high performing, FDA cleared, C. difficile testing formats, including toxin, GDH and molecular tests. Second, our illumigene molecular platform, with its expanding menu, requires no expensive equipment purchase or maintenance contract, which makes it an attractive and affordable option for any size hospital.

Foodborne Products

Revenues for our foodborne products (Enterohemorrhagic E. coli (“EHEC”) and Campylobacter), all of which are immunoassay products, grew to $5,400 during the fiscal 2014 second quarter, or 1% growth over the fiscal 2013 second quarter; $11,100 of revenues, or 1% year over year growth, during the six months ended March 31, 2014. We are disappointed in these growth rates and have re-emphasized the benefits of increased sensitivity and faster turnaround time versus culture methods in our marketing programs. While historically the primary competition for our foodborne products has been laboratory culture methods, during 2012 one of our competitors cleared through the FDA a shiga toxin test that competes with our EHEC test. We believe that our test offers better workflow, less hands-on time and quicker results, in addition to being fully CDC-compliant.

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H. pylori Products

During the second quarter of fiscal 2014, revenues from our H. pylori products, all of which are immunoassay products, grew 11% to $7,100; and grew 10% to $13,600 during the first six months of fiscal 2014. These increases continue to reflect the benefits of our partnerships with managed care companies in promoting the health and economic benefits of a test and treat strategy, and the ongoing effects of such strategy moving physician behavior away from serology-based testing toward direct antigen testing. A significant amount of the H. pylori product revenues are to reference labs, whose buying patterns may not be consistent period to period.

Respiratory Products

Total respiratory revenues from our Diagnostics segment decreased 8% to $5,300 during the fiscal 2014 second quarter; and decreased 13% to $10,100 for the six month year-to-date period. Contributing to this decreased revenue volume were double digit revenue decreases from influenza products, which reflect a weak influenza season, coupled with a crowded influenza test market. Partially offsetting the impact of lower influenza product revenues was growth in our illumigene Group A Strep and illumigene Mycoplasma products, which received FDA approval in September 2012 and June 2013, respectively.

Foreign Currency

During the second quarter of fiscal 2014, currency exchange rates had a $200 favorable impact on revenue; $150 favorable within the Diagnostics segment and $50 favorable in the Life Science segment. On a six month year-to-date basis, currency exchange rates had a $350 favorable impact on revenue, all of which was within the Diagnostics segment.

Significant Customers

Two U.S. distributors accounted for 35% and 42% of our Diagnostics segment’s total revenues for the second quarter of fiscal 2014 and 2013, respectively, and 36% and 44% during the six months ended March 31, 2014 and 2013, respectively. These revenues represented 26% and 32% of consolidated revenues for the fiscal 2014 and 2013 second quarters, respectively, and 27% and 34% for the respective year-to-date six month periods.

Within our Life Science segment, two diagnostic manufacturing customers accounted for 23% and 18% of the segment’s total revenues for the second quarter of fiscal 2014 and 2013, respectively, and 17% and 18% during the six months ended March 31, 2014 and 2013, respectively.

Medical Device Tax

On January 1, 2013, the medical device tax established as part of the U.S. healthcare reform legislation became effective, and as a result, the Company made its first required tax deposit near the end of January 2013. The Company recorded approximately $450 of medical device tax expense during each of the fiscal 2014 and 2013 second quarters, which is reflected as a component of cost of sales in the accompanying Condensed Consolidated Statements of Operations. During the six month periods ended March 31, 2014 and 2013, medical device tax expense totaling approximately $900 and $450, respectively, was recorded.

Gross Profit

	Three Months Ended March 31,									Six Months Ended March 31,
	2014			2013			Change			2014			2013			Change
Gross Profit	$	31,593		$	30,743			3	%	$	59,600		$	59,539			—	%
Gross Profit Margin		63	%		65	%		-2 points			63	%		64	%		-1 point

The overall slight gross profit margin decrease for the three and six months ended March 31, 2014 primarily results from the combined effects of (i) mix of revenues from the Company’s segments; (ii) mix of products sold; and for the six month period only (iii) the medical device tax, which did not exist during the first quarter of fiscal 2013 (see discussion in Medical Device Tax above).

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Our overall operations consist of the sale of diagnostic test kits for various disease states and in alternative test formats, as well as bioresearch reagents, bulk antigens and antibodies, PCR/qPCR reagents, nucleotides, competent cells, proficiency panels, and contract research and development, and contract manufacturing services. Product revenue mix shifts, in the normal course of business, can cause the consolidated gross profit margin to fluctuate by several points.

Operating Expenses

	Three Months Ended March 31, 2014
	Research & Development			Selling & Marketing			General & Administrative			Total Operating Expenses
2013 Expenses	$	2,811		$	5,471		$	7,208		$	15,490
% of Revenues		6	%		12	%		15	%		33	%
Fiscal 2014 Increases (Decreases):
Diagnostics		434			664			(710	)		388
Life Science		(59	)		326			(218	)		49
2014 Expenses	$	3,186		$	6,461		$	6,280		$	15,927
% of Revenues		6	%		13	%		13	%		32	%
% Increase (Decrease)		13	%		18	%		(13	)%		3	%
	Six Months Ended March 31, 2014
	Research & Development			Selling & Marketing			General & Administrative			Total Operating Expenses
2013 Expenses	$	5,328		$	11,164		$	14,703		$	31,195
% of Revenues		6	%		12	%		16	%		34	%
Fiscal 2014 Increases (Decreases):
Diagnostics		715			883			(463	)		1,135
Life Science		(4	)		491			(509	)		(22	)
2014 Expenses	$	6,039		$	12,538		$	13,731		$	32,308
% of Revenues		6	%		13	%		14	%		34	%
% Increase (Decrease)		13	%		12	%		(7	)%		4	%

Overall, total operating expense increased during both the second quarter and first six months of fiscal 2014 relative to the comparable prior fiscal year periods, decreasing slightly as a percentage of quarterly consolidated revenues and remaining a consistent percentage of revenues on a year-to-date basis. These levels of operating expenses result in large part from the combined effects of our (i) ongoing efforts to control spending in each of our segments while investing the necessary resources in our strategic areas of growth, including increased investment in Research & Development for our molecular platform products; and (ii) overall decreased incentive compensation expense in light of the decline in corporate-wide operating profits.

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Operating expenses for the Diagnostics segment increased $388 for the second quarter of fiscal 2014 compared to the fiscal 2013 second quarter, and in the first six months of fiscal 2014, increased $1,135 over the comparable prior year period. These overall increases result largely from the combined effects of (i) currency exchange rates (increases of $50 and $100 for the quarter and year-to-date, respectively); and (ii) the following:

Research & Development

Overall increase in spending on new product development activities, related primarily to the previously noted products for our illumigene molecular platform, as well as immunoassay products in development.

Selling & Marketing

Addition of field sales force personnel, including the filling of open territorial positions, since the prior year quarter, resulting in an approximate $400 increase in personnel-related expenses on a quarterly basis ($600 on a year-to-date basis), along with increased product sample expense of approximately $150 both quarterly and year-to-date.

General & Administrative

A decrease in bonus and profit sharing expenses as a result of the previously noted year-to-date decline in corporate-wide operating profits, partially offset by an approximate $100 and $600 increase in stock-based compensation during the second quarter and first six months of fiscal 2014, respectively, and other less significant general operating expense increases.

Operating expenses for the Life Science segment increased $49 and decreased $22 for the second quarter and first six months of fiscal 2014, respectively. This activity reflects in large part the net effects of (i) currency exchange rates (decreases of $10 and $50 for the quarter and year-to-date, respectively); (ii) ongoing increased sales and marketing investments; and (iii) decreased bonus expenses resulting from the decline in corporate-wide operating profits.

Operating Income

Operating income increased 3% to $15,666 for the second quarter of fiscal 2014, and decreased 4% to $27,292 for the first six months of fiscal 2014, as a result of the factors discussed above.

Income Taxes

The effective rate for income taxes was 34% for the second quarters of both fiscal 2014 and fiscal 2013, and 34% and 35% for the six month year-to-date periods ended March 31, 2014 and 2013, respectively. For the fiscal year ending September 30, 2014, we expect the effective tax rate to approximate 34%-35%.

In September 2013, the Internal Revenue Service issued Treasury Decision 9636, which enacted final tax regulations regarding the capitalization and expensing of amounts paid to acquire, produce, or improve tangible property. The regulations also include guidance regarding the retirement of depreciable property. The regulations are required to be effective in taxable years beginning on or after January 1, 2014, although taxpayers may choose to apply them in taxable years beginning on or after January 1, 2012. The Company is currently assessing the impact of the final regulations on its financial statements.

Liquidity and Capital Resources

Comparative Cash Flow Analysis

Our cash flow and financing requirements are determined by analyses of operating and capital spending budgets, consideration of acquisition plans, and consideration of common share dividends. We have historically maintained a credit facility to augment working capital requirements and to respond quickly to acquisition opportunities. Our investment portfolio presently consists of overnight repurchase agreements.

We have an investment policy that guides the holdings of our investment portfolio. Our objectives in managing the investment portfolio are to (i) preserve capital; (ii) provide sufficient liquidity to meet working capital requirements and fund strategic objectives such as acquisitions; and (iii) capture a market rate of return commensurate with market conditions and our policy’s investment eligibility criteria. As we look forward, we will continue to manage the holdings of our investment portfolio with preservation of capital being the primary objective.

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We do not expect current conditions in the financial markets, or overall economic conditions, to have a significant impact on our liquidity needs, financial condition, or results of operations, although no assurances can be made in this regard. We intend to continue to fund our working capital requirements and dividends from current cash flows from operating activities and cash on hand. If needed, we also have an additional source of liquidity through our $30,000 bank credit facility. Approximately $3,500 of our accounts receivable at March 31, 2014 is due from Italian hospital customers whose funding ultimately comes from the Italian government, an amount which is consistent with the balance due on such accounts at September 30, 2013. Our liquidity needs may change if overall economic conditions change and/or liquidity and credit within the financial markets tightens for an extended period of time, and such conditions impact the collectibility of our customer accounts receivable or impact credit terms with our vendors, or disrupt the supply of raw materials and services.

Net cash provided by operating activities decreased 39% for the first six months of fiscal 2014 to $13,556, reflecting the 5% decrease in net earnings, along with the effects of the payment of incentive bonus payments related to fiscal 2013, the timing of federal income tax payments, inventory purchases, and the timing of payments from and to customers and suppliers, respectively. Net cash flows from operating activities and cash on hand are anticipated to be adequate to fund working capital requirements, capital expenditures and dividends during the next 12 months.

Capital Resources

We have a $30,000 credit facility with a commercial bank that expires on September 15, 2015. As of April 30, 2014, there were no borrowings outstanding on this facility and we had 100% borrowing capacity available to us. We have had no borrowings outstanding under this facility during the first six months of fiscal 2014 or during the full year of fiscal 2013.

Our capital expenditures are estimated to range between approximately $5,000 to $7,000 for fiscal 2014, with the actual amount depending upon actual operating results and the phasing of certain projects. Such expenditures may be funded with cash and equivalents on hand, operating cash flows, and/or availability under the $30,000 credit facility discussed above. This range of capital expenditures includes approximately $4,000 related to an expansion of our molecular diagnostic manufacturing capacity in Cincinnati, Ohio.

We do not utilize any special-purpose financing vehicles or have any undisclosed off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Company’s exposure to market risk since September 30, 2013.

ITEM 4. CONTROLS AND PROCEDURES

As of March 31, 2014, an evaluation was completed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) and 15d-15(b) promulgated under the Securities Exchange Act of 1934, as amended. Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of March 31, 2014. There have been no changes in our internal control over financial reporting identified in connection with the evaluation of internal control that occurred during the second fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, or in other factors that could materially affect internal control subsequent to March 31, 2014.

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PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

There have been no material changes from risk factors as previously disclosed in the Registrant’s Form 10-K in response to Item 1A to Part I of Form 10-K.

ITEM 6. EXHIBITS

The following exhibits are being filed or furnished as a part of this Quarterly Report on Form 10-Q.

31.1 Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a)

31.2 Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a)

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

101 The following financial information from Meridian Bioscience Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 filed with the SEC on May 12, 2014, formatted in XBRL includes: (i) Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2014 and 2013, (ii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended March 31, 2014 and 2013, (iii) Condensed Consolidated Statements of Cash Flows for the six months ended March 31, 2014 and 2013, (iv) Condensed Consolidated Balance Sheets as of March 31, 2014 and September 30, 2013, (v) Condensed Consolidated Statement of Shareholders’ Equity for the six months ended March 31, 2014, and (vi) the Notes to Condensed Consolidated Financial Statements

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		MERIDIAN BIOSCIENCE, INC.
Date: May 12, 2014	By:	/s/ Melissa A. Lueke
		Melissa A. Lueke
		Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

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EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a)

I, John A. Kraeutler, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Meridian Bioscience, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date: May 12, 2014

/s/ John A. Kraeutler

John A. Kraeutler

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a)

I, Melissa A. Lueke, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Meridian Bioscience, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date: May 12, 2014

/s/ Melissa A. Lueke

Melissa A. Lueke

Executive Vice President and Chief Financial Officer

EX-32

Meridian Bioscience, Inc.

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 Quarterly Report of Meridian Bioscience, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2014 (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/ John A. Kraeutler

John A. Kraeutler

Chief Executive Officer

May 12, 2014

/s/ Melissa A. Lueke

Melissa A. Lueke

Executive Vice President and

Chief Financial Officer

May 12, 2014

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Significant Accounting Policies

6 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies

(a) Revenue Recognition and Accounts Receivable –

Revenue is generally recognized from sales when product is shipped and title has passed to the customer. Revenue for the Diagnostics segment is reduced at the date of sale for product price adjustments due certain distributors under local contracts. Management estimates accruals for distributor price adjustments based on local contract terms, sales data provided by distributors, estimates of inventories of our products held by distributors, historical statistics, current trends, and other factors. Changes to the accruals are recorded in the period that they become known. Such accruals were $4,207 at March 31, 2014 and $3,866 at September 30, 2013, and have been netted against accounts receivable.

Revenue for our Diagnostics segment includes revenue for our illumigene^® molecular test system. This system includes an instrument, instrument accessories and test kits. In markets where the test system is sold via multiple deliverable arrangements (i.e., the United States, Australia, Belgium, France, Holland and Italy), the cost of the instrument and instrument accessories are deferred upon placement at a customer and amortized on a straight-line basis into cost of sales over the expected utilization period, generally three years.

We evaluate whether each deliverable in the arrangement is a separate unit of accounting. The significant deliverables are an instrument, instrument accessories (e.g., printer) and test kits. An instrument and instrument accessories are delivered to the customer prior to the start of the customer utilization period, in order to accommodate customer set-up and installation. There is de minimis consideration received from the customer at the time of instrument placement. We have determined that the instrument and instrument accessories are not a separate unit of accounting because such equipment can only be used to process and read the results from our illumigene diagnostic tests (i.e., our instrument and test kits function together to deliver a diagnostic test result), and therefore the instrument and instrument accessories do not have standalone value to the customer. Consequently, there is no revenue allocated to the placement of the instrument and instrument accessories. Test kits are delivered to the customer over the utilization period of the instrument, which we estimate has a useful life of three years. Our average customer contract period, including estimated renewals, is at least equal to the estimated three-year utilization period. Revenue for the sale of test kits is recognized upon shipment and transfer of title to the customers.

In markets where the test system is not sold via multiple deliverable arrangements (i.e., countries other than the United States, Australia, Belgium, France, Holland and Italy), the cost of the instrument and instrument accessories is charged to cost of sales at the time of shipment and transfer of title to the customer. Revenue for the sales of instruments and instrument accessories and test kits is recognized upon shipment and transfer of title to the customers. In these markets, our illumigene molecular test system is sold to independent distributors who inventory the instruments, instrument accessories and test kits for resale to end-users.

Our products are generally not subject to a customer right of return except for product recall events under the rules and regulations of the Food and Drug Administration or equivalent agencies outside the United States. In this circumstance, the costs to replace affected products would be accrued at the time a loss was probable and estimable.

Life Science revenue for contract services may come from research and development services or manufacturing services, including process development work, or a combination of both. Revenue is recognized based on each of the deliverables in a given arrangement having distinct and separate customer pricing. Depending on the nature of the arrangement, revenue is recognized as services are performed and billed, upon completion and acceptance by the customer, or upon delivery of product and acceptance by the customer.

Trade accounts receivable are recorded in the accompanying Condensed Consolidated Balance Sheets at invoiced amounts less provisions for distributor price adjustments under local contracts and doubtful accounts. The allowance for doubtful accounts represents our estimate of probable credit losses and is based on historical write-off experience. The allowance for doubtful accounts and related metrics, such as days’ sales outstanding, are reviewed monthly. Accounts with past due balances over 90 days are reviewed individually for collectibility. Customer invoices are charged off against the allowance when we believe it is probable that the invoices will not be paid.

(b) Comprehensive Income (Loss) –

As reflected in the accompanying Condensed Consolidated Statements of Comprehensive Income, our comprehensive income or loss is comprised of net earnings and foreign currency translation.

Assets and liabilities of foreign operations are translated using period-end exchange rates with gains or losses resulting from translation included as a separate component of comprehensive income or loss. Revenues and expenses are translated using exchange rates prevailing during the period. We also recognize foreign currency transaction gains and losses on certain assets and liabilities that are denominated in non-functional currencies. These gains and losses are included in other income and expense in the accompanying Condensed Consolidated Statements of Operations.

(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. We prepare 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 our tax returns, typically occurring in the third and fourth quarters of the current fiscal year for the preceding fiscal year’s estimates.

We account for uncertain tax positions using a benefit recognition model with a two-step approach: (i) a more-likely-than-not recognition criterion; and (ii) a measurement attribute that measures the position as the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement. If it is not more likely than not that the benefit will be sustained on its technical merits, no benefit is recorded. We recognize accrued interest and penalties related to unrecognized tax benefits as a portion of our income tax provision in the Condensed Consolidated Statements of Operations.

In September 2013, the Internal Revenue Service issued Treasury Decision 9636, which enacted final tax regulations regarding the capitalization and expensing of amounts paid to acquire, produce, or improve tangible property. The regulations also include guidance regarding the retirement of depreciable property. The regulations are required to be effective in taxable years beginning on or after January 1, 2014, although taxpayers may choose to apply them in taxable years beginning on or after January 1, 2012. The Company is currently assessing the impact of the final regulations on its financial statements.

(d) Stock-based Compensation –

We recognize compensation expense for all share-based awards made to employees, based upon the fair value of the share-based award on the date of the grant. Awards are expensed over their requisite service periods.

(e) Cash and Cash Equivalents –

Cash and cash equivalents include the following components:

	March 31, 2014				September 30, 2013
	Cash and Equivalents		Other		Cash and Equivalents		Other
Overnight repurchase agreements	$	23,791	$	—	$	32,103	$	—
Cash on hand -
Restricted		—		1,000		—		1,000
Unrestricted		14,422		—		12,179		—
Total	$	38,213	$	1,000	$	44,282	$	1,000

(f) Reclassifications –

Certain reclassifications have been made to the prior period financial statements to conform to the current fiscal period presentation. Such reclassifications had no impact on net earnings or shareholders’ equity.

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Basis of Presentation

6 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Basis of Presentation

1. Basis of Presentation

The interim condensed consolidated financial statements are unaudited and are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, and the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the interim financial statements include all normal adjustments and disclosures necessary to present fairly the Company’s financial position as of March 31, 2014, the results of its operations for the three and six month periods ended March 31, 2014 and 2013, and its cash flows for the six month periods ended March 31, 2014 and 2013. These statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s fiscal 2013 Annual Report on Form 10-K. Financial information as of September 30, 2013 has been derived from the Company’s audited consolidated financial statements.

The results of operations for interim periods are not necessarily indicative of the results to be expected for the year.

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Income Statement [Abstract]
NET REVENUES	$ 50,134	$ 47,265	$ 94,928	$ 92,616
COST OF SALES	18,541	16,522	35,328	33,077
GROSS PROFIT	31,593	30,743	59,600	59,539
OPERATING EXPENSES
Research and development	3,186	2,811	6,039	5,328
Selling and marketing	6,461	5,471	12,538	11,164
General and administrative	6,280	7,208	13,731	14,703
Total operating expenses	15,927	15,490	32,308	31,195
OPERATING INCOME	15,666	15,253	27,292	28,344
OTHER INCOME (EXPENSE)
Interest income	6	19	10	26
Other, net	(28)	257	(248)	385
Total other income (expense)	(22)	276	(238)	411
EARNINGS BEFORE INCOME TAXES	15,644	15,529	27,054	28,755
INCOME TAX PROVISION	5,344	5,280	9,328	10,032
NET EARNINGS	$ 10,300	$ 10,249	$ 17,726	$ 18,723
BASIC EARNINGS PER COMMON SHARE	$ 0.25	$ 0.25	$ 0.43	$ 0.45
DILUTED EARNINGS PER COMMON SHARE	$ 0.24	$ 0.24	$ 0.42	$ 0.45
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC	41,471	41,266	41,434	41,188
EFFECT OF DILUTIVE STOCK OPTIONS AND RESTRICTED SHARES AND UNITS	676	681	686	642
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED	42,147	41,947	42,120	41,830
ANTI-DILUTIVE SECURITIES:
Common share options and restricted shares and units	168	262	137	295
DIVIDENDS DECLARED PER COMMON SHARE	$ 0.20		$ 0.39	$ 0.38

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Statement Of Financial Position [Abstract]
Allowances for accounts receivable	$ 206	$ 233
Preferred stock, par value
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued
Common stock, par value
Common stock, shares authorized	71,000,000	71,000,000
Common stock, shares issued	41,555,653	41,517,839

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Reportable Segment and Major Customers Information - Segment Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Sep. 30, 2013
Segment Reporting Information [Line Items]
Net sales - Third-party	$ 50,134	$ 47,265	$ 94,928	$ 92,616
Net sales - Inter-segment
Operating income	15,666	15,253	27,292	28,344
Goodwill	23,507		23,507		23,115
Other intangible assets, net	8,841		8,841		8,057
Total assets	178,155		178,155		176,748
Operating Segments [Member] | Diagnostics [Member]
Segment Reporting Information [Line Items]
Net sales - Third-party	37,061	36,403	71,898	72,072
Net sales - Inter-segment	154	105	263	203
Operating income	12,301	12,494	21,685	23,834
Goodwill	1,250		1,250		1,250
Other intangible assets, net	2,968		2,968		1,561
Total assets	111,319		111,319		112,054
Operating Segments [Member] | Life Science [Member]
Segment Reporting Information [Line Items]
Net sales - Third-party	13,073	10,862	23,030	20,544
Net sales - Inter-segment	225	350	484	508
Operating income	3,306	3,046	5,567	4,680
Goodwill	22,257		22,257		21,865
Other intangible assets, net	5,873		5,873		6,496
Total assets	115,444		115,444		110,111
Eliminations [Member]
Segment Reporting Information [Line Items]
Net sales - Third-party
Net sales - Inter-segment	(379)	(455)	(747)	(711)
Operating income	59	(287)	40	(170)
Goodwill
Other intangible assets, net
Total assets	$ (48,608)		$ (48,608)		$ (45,417)

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Intangible Assets - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Amortization Of Intangible Assets [Line Items]
Amortization of intangible assets	$ 516	$ 585	$ 1,042	$ 1,165
Estimated amortization expense for intangible assets remainder of fiscal year 2014	967		967
2015	1,777		1,777
2016	1,432		1,432
2017	1,163		1,163
2018	1,140		1,140
2019	1,099		1,099
Trademarks, licenses and patents [Member] | Illumigene Molecular Technology [Member]
Amortization Of Intangible Assets [Line Items]
Licensing rights acquired			$ 1,638
Weighted average amortization period			8 years 6 months

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Condensed Consolidated Statement of Changes in Shareholders' Equity (Unaudited) (USD $) In Thousands	Total	Common Shares Issued [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Beginning balance at Sep. 30, 2013	$ 155,045		$ 107,412	$ 46,888	$ 745
Beginning balance, Shares at Sep. 30, 2013		41,518
Cash dividends paid	(16,169)			(16,169)
Exercise of stock options	513		513
Exercise of stock options, Shares		36
Conversion of restricted stock units		2
Stock compensation expense	2,157		2,157
Net earnings	17,726			17,726
Foreign currency translation adjustment	1,060				1,060
Ending balance at Mar. 31, 2014	$ 160,332		$ 110,082	$ 48,445	$ 1,805
Ending balance, Shares at Mar. 31, 2014		41,556

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Statement Of Income And Comprehensive Income [Abstract]
Net earnings	$ 10,300	$ 10,249	$ 17,726	$ 18,723
Foreign currency translation adjustment	337	(1,217)	1,060	(971)
COMPREHENSIVE INCOME	$ 10,637	$ 9,032	$ 18,786	$ 17,752

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Intangible Assets (Tables)

6 Months Ended

Mar. 31, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Acquired Intangible Assets Subject to Amortization

A summary of our acquired intangible assets subject to amortization, as of March 31, 2014 and September 30, 2013 is as follows:

	March 31, 2014				September 30, 2013
	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Manufacturing technologies, core products and cell lines	$	11,723	$	10,375	$	11,676	$	10,097
Trademarks, licenses and patents		6,474		2,481		4,748		2,130
Customer lists and supply agreements		12,481		8,981		12,353		8,493
	$	30,678	$	21,837	$	28,777	$	20,720

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Document and Entity Information	6 Months Ended
	Mar. 31, 2014	Apr. 30, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Trading Symbol	VIVO
Entity Registrant Name	MERIDIAN BIOSCIENCE INC
Entity Central Index Key	0000794172
Current Fiscal Year End Date	--09-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		41,555,911

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Significant Accounting Policies - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Mar. 31, 2014	Sep. 30, 2013
Accounting Policies [Abstract]
Accrued distributor price adjustments	$ 4,207	$ 3,866
Expected instrument utilization period	3 years
Period of review of accounts individually	90 days
Likelihood percentage of tax benefit being recognized upon ultimate settlement	50.00%
Tax benefits recognized from uncertain tax positions measurement	Greater than 50% likely of being ultimately realized upon settlement

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$ 17,726	$ 18,723
Non-cash items included in net earnings:
Depreciation of property, plant and equipment	1,756	1,666
Amortization of intangible assets	1,042	1,165
Amortization of deferred illumigene instrument costs	864	746
Stock-based compensation	2,157	1,573
Deferred income taxes	(31)	(278)
Loss on disposition and write-down of fixed assets and other assets		10
Change in current assets	(6,656)	477
Change in current liabilities	(3,143)	(1,116)
Other, net	(159)	(586)
Net cash provided by operating activities	13,556	22,380
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment	(2,573)	(1,408)
Purchases of intangible assets	(1,677)	(20)
Net cash used for investing activities	(4,250)	(1,428)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid	(16,169)	(15,652)
Proceeds and tax benefits from exercises of stock options	540	2,055
Net cash used for financing activities	(15,629)	(13,597)
Effect of Exchange Rate Changes on Cash and Equivalents	254	(354)
Net (Decrease) Increase in Cash and Equivalents	(6,069)	7,001
Cash and Equivalents at Beginning of Period	44,282	31,593
Cash and Equivalents at End of Period	$ 38,213	$ 38,594

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Intangible Assets

6 Months Ended

Mar. 31, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets

5. Intangible Assets

A summary of our acquired intangible assets subject to amortization, as of March 31, 2014 and September 30, 2013 is as follows:

	March 31, 2014				September 30, 2013
	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Manufacturing technologies, core products and cell lines	$	11,723	$	10,375	$	11,676	$	10,097
Trademarks, licenses and patents		6,474		2,481		4,748		2,130
Customer lists and supply agreements		12,481		8,981		12,353		8,493
	$	30,678	$	21,837	$	28,777	$	20,720

During the first quarter of fiscal 2014, we acquired the remaining licensing rights related to our illumigene molecular technology for $1,638. These rights are being amortized over a weighted average period of approximately 8.5 years.

The actual aggregate amortization expense for these intangible assets was $516 and $585 for the three months ended March 31, 2014 and 2013, respectively, and $1,042 and $1,165 for the six months ended March 31, 2014 and 2013, respectively. The estimated aggregate amortization expense for these intangible assets for each of the fiscal years through fiscal 2019 is as follows: remainder of fiscal 2014 – $967, fiscal 2015 – $1,777, fiscal 2016 – $1,432, fiscal 2017 – $1,163, fiscal 2018 – $1,140 and fiscal 2019 – $1,099.

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Reportable Segment and Major Customers Information

6 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Reportable Segment and Major Customers Information

4. Reportable Segment and Major Customers Information

Meridian was formed in 1976 and functions as a fully-integrated research, development, manufacturing, marketing and sales organization with primary emphasis in the fields of in vitro diagnostics and life science. Our principal businesses are (i) the development, manufacture and distribution of diagnostic test kits primarily for gastrointestinal, viral, respiratory and parasitic infectious diseases; and (ii) the manufacture and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells and bioresearch reagents used by researchers and other diagnostic manufacturers, and the contract development and manufacture of proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.

In the fourth quarter of fiscal 2013, we aggregated our Diagnostics operating segments into a single reportable segment, thereby resulting in our reportable segments being Diagnostics and Life Science. The prior period information reflected herein has been conformed to the current period presentation.

The Diagnostics segment is headquartered in Cincinnati, Ohio, which also serves as the base of manufacturing operations and research and development. The Diagnostics segment has sales and distribution facilities in the United States, Europe and Australia. The Life Science segment consists of manufacturing operations in Memphis, Tennessee; Boca Raton, Florida; London, England; Luckenwalde, Germany; and Sydney, Australia, and the sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells and bioresearch reagents domestically and abroad, including a sales and business development location in Singapore. The Life Science segment also includes the contract development and manufacture of cGMP clinical grade proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.

Amounts due from two Diagnostics distributor customers accounted for 15% and 17% of consolidated accounts receivable at March 31, 2014 and September 30, 2013, respectively. Revenue from these two distributor customers accounted for 35% and 42% of the Diagnostics segment third-party revenue during the three months ended March 31, 2014 and 2013, respectively, and 36% and 44% during the six months ended March 31, 2014 and 2013, respectively. In addition, approximately $3,500 of our accounts receivable at both March 31, 2014 and September 30, 2013 is due from Italian hospital customers whose funding ultimately comes from the Italian government, representing 13% of consolidated accounts receivable in each of the respective periods.

Within our Life Science segment, two diagnostic manufacturing customers accounted for 23% and 18% of the segment’s third-party revenue during the three months ended March 31, 2014 and 2013, respectively, and 17% and 18% during the six months ended March 31, 2014 and 2013, respectively.

Segment information for the interim periods is as follows:

	Diagnostics		Life Science		Eliminations(1)			Total
Three Months Ended March 31, 2014
Net revenues -
Third-party	$	37,061	$	13,073	$	—		$	50,134
Inter-segment		154		225		(379	)		—
Operating income		12,301		3,306		59			15,666
Goodwill (March 31, 2014)		1,250		22,257		—			23,507
Other intangible assets, net (March 31, 2014)		2,968		5,873		—			8,841
Total assets (March 31, 2014)		111,319		115,444		(48,608	)		178,155
Three Months Ended March 31, 2013
Net revenues -
Third-party	$	36,403	$	10,862	$	—		$	47,265
Inter-segment		105		350		(455	)		—
Operating income		12,494		3,046		(287	)		15,253
Goodwill (September 30, 2013)		1,250		21,865		—			23,115
Other intangible assets, net (September 30, 2013)		1,561		6,496		—			8,057
Total assets (September 30, 2013)		112,054		110,111		(45,417	)		176,748
Six Months Ended March 31, 2014
Net revenues -
Third-party	$	71,898	$	23,030	$	—		$	94,928
Inter-segment		263		484		(747	)		—
Operating income		21,685		5,567		40			27,292
Six Months Ended March 31, 2013
Net revenues -
Third-party	$	72,072	$	20,544	$	—		$	92,616
Inter-segment		203		508		(711	)		—
Operating income		23,834		4,680		(170	)		28,344

(1) Eliminations consist of inter-segment transactions.

Transactions between segments are accounted for at established intercompany prices for internal and management purposes, with all intercompany amounts eliminated in consolidation.

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Intangible Assets - Summary of Acquired Intangible Assets Subject to Amortization (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 30,678	$ 28,777
Accumulated Amortization	21,837	20,720
Manufacturing technologies, core products and cell lines [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	11,723	11,676
Accumulated Amortization	10,375	10,097
Trademarks, licenses and patents [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	6,474	4,748
Accumulated Amortization	2,481	2,130
Customer lists and supply agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	12,481	12,353
Accumulated Amortization	$ 8,981	$ 8,493

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Significant Accounting Policies - Components of Cash and Cash Equivalents (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013	Mar. 31, 2013	Sep. 30, 2012
Cash and Cash Equivalents [Line Items]
Cash on hand - Restricted	$ 1,000	$ 1,000
Total	38,213	44,282	38,594	31,593
Cash and Cash Equivalents [Member]
Cash and Cash Equivalents [Line Items]
Overnight repurchase agreements	23,791	32,103
Cash on hand - Restricted
Cash on hand - Unrestricted	14,422	12,179
Total	38,213	44,282
Other [Member]
Cash and Cash Equivalents [Line Items]
Overnight repurchase agreements
Cash on hand - Restricted	1,000	1,000
Cash on hand - Unrestricted
Total	$ 1,000	$ 1,000

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Inventories (Tables)

6 Months Ended

Mar. 31, 2014

Inventory Disclosure [Abstract]

Components of Inventories

Inventories are comprised of the following:

	March 31, 2014		September 30, 2013
Raw materials	$	6,591	$	7,170
Work-in-process		5,989		8,585
Finished goods - illumigene instruments		2,694		1,980
Finished goods - kits and reagents		22,859		17,100
Total	$	38,133	$	34,835

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Significant Accounting Policies (Policies)

6 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Revenue Recognition and Accounts Receivable

(a) Revenue Recognition and Accounts Receivable –

Revenue is generally recognized from sales when product is shipped and title has passed to the customer. Revenue for the Diagnostics segment is reduced at the date of sale for product price adjustments due certain distributors under local contracts. Management estimates accruals for distributor price adjustments based on local contract terms, sales data provided by distributors, estimates of inventories of our products held by distributors, historical statistics, current trends, and other factors. Changes to the accruals are recorded in the period that they become known. Such accruals were $4,207 at March 31, 2014 and $3,866 at September 30, 2013, and have been netted against accounts receivable.

Revenue for our Diagnostics segment includes revenue for our illumigene^® molecular test system. This system includes an instrument, instrument accessories and test kits. In markets where the test system is sold via multiple deliverable arrangements (i.e., the United States, Australia, Belgium, France, Holland and Italy), the cost of the instrument and instrument accessories are deferred upon placement at a customer and amortized on a straight-line basis into cost of sales over the expected utilization period, generally three years.

We evaluate whether each deliverable in the arrangement is a separate unit of accounting. The significant deliverables are an instrument, instrument accessories (e.g., printer) and test kits. An instrument and instrument accessories are delivered to the customer prior to the start of the customer utilization period, in order to accommodate customer set-up and installation. There is de minimis consideration received from the customer at the time of instrument placement. We have determined that the instrument and instrument accessories are not a separate unit of accounting because such equipment can only be used to process and read the results from our illumigene diagnostic tests (i.e., our instrument and test kits function together to deliver a diagnostic test result), and therefore the instrument and instrument accessories do not have standalone value to the customer. Consequently, there is no revenue allocated to the placement of the instrument and instrument accessories. Test kits are delivered to the customer over the utilization period of the instrument, which we estimate has a useful life of three years. Our average customer contract period, including estimated renewals, is at least equal to the estimated three-year utilization period. Revenue for the sale of test kits is recognized upon shipment and transfer of title to the customers.

In markets where the test system is not sold via multiple deliverable arrangements (i.e., countries other than the United States, Australia, Belgium, France, Holland and Italy), the cost of the instrument and instrument accessories is charged to cost of sales at the time of shipment and transfer of title to the customer. Revenue for the sales of instruments and instrument accessories and test kits is recognized upon shipment and transfer of title to the customers. In these markets, our illumigene molecular test system is sold to independent distributors who inventory the instruments, instrument accessories and test kits for resale to end-users.

Our products are generally not subject to a customer right of return except for product recall events under the rules and regulations of the Food and Drug Administration or equivalent agencies outside the United States. In this circumstance, the costs to replace affected products would be accrued at the time a loss was probable and estimable.

Life Science revenue for contract services may come from research and development services or manufacturing services, including process development work, or a combination of both. Revenue is recognized based on each of the deliverables in a given arrangement having distinct and separate customer pricing. Depending on the nature of the arrangement, revenue is recognized as services are performed and billed, upon completion and acceptance by the customer, or upon delivery of product and acceptance by the customer.

Trade accounts receivable are recorded in the accompanying Condensed Consolidated Balance Sheets at invoiced amounts less provisions for distributor price adjustments under local contracts and doubtful accounts. The allowance for doubtful accounts represents our estimate of probable credit losses and is based on historical write-off experience. The allowance for doubtful accounts and related metrics, such as days’ sales outstanding, are reviewed monthly. Accounts with past due balances over 90 days are reviewed individually for collectibility. Customer invoices are charged off against the allowance when we believe it is probable that the invoices will not be paid.

Comprehensive Income (Loss)

(b) Comprehensive Income (Loss) –

As reflected in the accompanying Condensed Consolidated Statements of Comprehensive Income, our comprehensive income or loss is comprised of net earnings and foreign currency translation.

Assets and liabilities of foreign operations are translated using period-end exchange rates with gains or losses resulting from translation included as a separate component of comprehensive income or loss. Revenues and expenses are translated using exchange rates prevailing during the period. We also recognize foreign currency transaction gains and losses on certain assets and liabilities that are denominated in non-functional currencies. These gains and losses are included in other income and expense in the accompanying Condensed Consolidated Statements of Operations.

Income Taxes

(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. We prepare 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 our tax returns, typically occurring in the third and fourth quarters of the current fiscal year for the preceding fiscal year’s estimates.

We account for uncertain tax positions using a benefit recognition model with a two-step approach: (i) a more-likely-than-not recognition criterion; and (ii) a measurement attribute that measures the position as the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement. If it is not more likely than not that the benefit will be sustained on its technical merits, no benefit is recorded. We recognize accrued interest and penalties related to unrecognized tax benefits as a portion of our income tax provision in the Condensed Consolidated Statements of Operations.

In September 2013, the Internal Revenue Service issued Treasury Decision 9636, which enacted final tax regulations regarding the capitalization and expensing of amounts paid to acquire, produce, or improve tangible property. The regulations also include guidance regarding the retirement of depreciable property. The regulations are required to be effective in taxable years beginning on or after January 1, 2014, although taxpayers may choose to apply them in taxable years beginning on or after January 1, 2012. The Company is currently assessing the impact of the final regulations on its financial statements.

Stock-based Compensation

(d) Stock-based Compensation –

We recognize compensation expense for all share-based awards made to employees, based upon the fair value of the share-based award on the date of the grant. Awards are expensed over their requisite service periods.

Cash and Cash Equivalents

(e) Cash and Cash Equivalents –

Cash and cash equivalents include the following components:

	March 31, 2014				September 30, 2013
	Cash and Equivalents		Other		Cash and Equivalents		Other
Overnight repurchase agreements	$	23,791	$	—	$	32,103	$	—
Cash on hand -
Restricted		—		1,000		—		1,000
Unrestricted		14,422		—		12,179		—
Total	$	38,213	$	1,000	$	44,282	$	1,000

Reclassifications

(f) Reclassifications –

Certain reclassifications have been made to the prior period financial statements to conform to the current fiscal period presentation. Such reclassifications had no impact on net earnings or shareholders’ equity.

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Significant Accounting Policies (Tables)

6 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Components of Cash and Cash Equivalents

Cash and cash equivalents include the following components:

	March 31, 2014				September 30, 2013
	Cash and Equivalents		Other		Cash and Equivalents		Other
Overnight repurchase agreements	$	23,791	$	—	$	32,103	$	—
Cash on hand -
Restricted		—		1,000		—		1,000
Unrestricted		14,422		—		12,179		—
Total	$	38,213	$	1,000	$	44,282	$	1,000

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Reportable Segment and Major Customers Information (Tables)

6 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Information

Segment information for the interim periods is as follows:

	Diagnostics		Life Science		Eliminations(1)			Total
Three Months Ended March 31, 2014
Net revenues -
Third-party	$	37,061	$	13,073	$	—		$	50,134
Inter-segment		154		225		(379	)		—
Operating income		12,301		3,306		59			15,666
Goodwill (March 31, 2014)		1,250		22,257		—			23,507
Other intangible assets, net (March 31, 2014)		2,968		5,873		—			8,841
Total assets (March 31, 2014)		111,319		115,444		(48,608	)		178,155
Three Months Ended March 31, 2013
Net revenues -
Third-party	$	36,403	$	10,862	$	—		$	47,265
Inter-segment		105		350		(455	)		—
Operating income		12,494		3,046		(287	)		15,253
Goodwill (September 30, 2013)		1,250		21,865		—			23,115
Other intangible assets, net (September 30, 2013)		1,561		6,496		—			8,057
Total assets (September 30, 2013)		112,054		110,111		(45,417	)		176,748
Six Months Ended March 31, 2014
Net revenues -
Third-party	$	71,898	$	23,030	$	—		$	94,928
Inter-segment		263		484		(747	)		—
Operating income		21,685		5,567		40			27,292
Six Months Ended March 31, 2013
Net revenues -
Third-party	$	72,072	$	20,544	$	—		$	92,616
Inter-segment		203		508		(711	)		—
Operating income		23,834		4,680		(170	)		28,344

(1) Eliminations consist of inter-segment transactions.

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Reportable Segment and Major Customers Information - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014 Customer	Mar. 31, 2013	Sep. 30, 2013
Diagnostics [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of customers			2
Amounts due from customers	15.00%		15.00%		17.00%
Percentage of segment's third party sales	35.00%	42.00%	36.00%	44.00%
Diagnostics [Member] | ITALY | Hospital Customers [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Amounts due from customers	13.00%		13.00%		13.00%
Account receivable	$ 3,500		$ 3,500		$ 3,500
Life Science [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of customers			2
Percentage of segment's third party sales	23.00%	18.00%	17.00%	18.00%

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
CURRENT ASSETS
Cash and equivalents	$ 38,213	$ 44,282
Accounts receivable, less allowances of $206 and $233	26,799	26,183
Inventories	38,133	34,835
Prepaid expenses and other current assets	6,454	4,643
Deferred income taxes	4,352	4,145
Total current assets	113,951	114,088
PROPERTY, PLANT AND EQUIPMENT, at Cost
Land	1,186	1,183
Buildings and improvements	26,900	26,848
Machinery, equipment and furniture	39,315	38,502
Construction in progress	2,190	554
Subtotal	69,591	67,087
Less: accumulated depreciation and amortization	42,702	40,996
Net property, plant and equipment	26,889	26,091
OTHER ASSETS
Goodwill	23,507	23,115
Other intangible assets, net	8,841	8,057
Restricted cash	1,000	1,000
Deferred illumigene instrument costs, net	2,719	3,270
Deferred income taxes	930	823
Other assets	318	304
Total other assets	37,315	36,569
TOTAL ASSETS	178,155	176,748
CURRENT LIABILITIES
Accounts payable	7,829	5,592
Accrued employee compensation costs	3,586	9,670
Other accrued expenses	5,570	5,462
Income taxes payable	838	979
Total current liabilities	17,823	21,703
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, 41,555,653 and 41,517,839 shares issued, respectively
Additional paid-in capital	110,082	107,412
Retained earnings	48,445	46,888
Accumulated other comprehensive income	1,805	745
Total shareholders' equity	160,332	155,045
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 178,155	$ 176,748

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Inventories

6 Months Ended

Mar. 31, 2014

Inventory Disclosure [Abstract]

Inventories

3. Inventories

Inventories are comprised of the following:

	March 31, 2014		September 30, 2013
Raw materials	$	6,591	$	7,170
Work-in-process		5,989		8,585
Finished goods - illumigene instruments		2,694		1,980
Finished goods - kits and reagents		22,859		17,100
Total	$	38,133	$	34,835

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Inventories - Components of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Inventory [Line Items]
Raw materials	$ 6,591	$ 7,170
Work-in-process	5,989	8,585
Total	38,133	34,835
Illumigene instruments [Member]
Inventory [Line Items]
Finished goods	2,694	1,980
Kits and reagents [Member]
Inventory [Line Items]
Finished goods	$ 22,859	$ 17,100