ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class |
Trading Symbol |
Name of each exchange of which registered | ||
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The | ||
(NASDAQ Global Select Market) |
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☒ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging G rowth C ompany |
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Page |
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Item 1 |
4 |
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Item 1A |
11 |
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Item 1B |
20 |
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Item 2 |
21 |
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Item 3 |
21 |
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Item 4 |
22 |
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Item 5 |
22 |
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Item 6 |
24 |
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Item 7 |
24 |
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Item 7A |
33 |
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Item 8 |
34 |
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Item 9 |
68 |
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Item 9A |
68 |
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Item 9B |
68 |
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Item 10 |
69 |
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Item 11 |
69 |
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Item 12 |
69 |
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Item 13 |
69 |
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Item 14 |
69 |
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Item 15 |
70 |
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Item 16 |
72 |
Type of Segment Information |
Location within Annual Report on Form 10-K | |
Physical locations and activities |
Item 2. “Properties” | |
Revenue by geographic region |
Item 7. “Management’s Discussion and Analysis of Financial Condition & Results of Operations” (hereafter “MD&A”) | |
Financial information |
Note 9 of Consolidated Financial Statements |
• | Real-time PCR Amplification (Revogene brand) 1-8 tests per run in about one hour. Current menu includes four FDA-cleared assays. Simple sample prep, footprint and test turnaround time make the Revogene platform suitable for Integrated Delivery Networks (“IDNs”) and hospital systems using a decentralized testing approach. |
• | Isothermal DNA Amplification (Alethia brand) C. difficile, Streptococcus Streptococcus |
• | Lateral Flow Immunoassay (Curian brand) time-to-result analyzer readout in 20 minutes. The 510(k) application for the Curian instrument and its first assay, a stool antigen test for H. pylori |
• | Rapid Immunoassay (Immuno Card Card single-use immunoassays that have fast turnaround times (generally under 20 minutes); and can reduce expensive send-outs for hospitals and outpatient clinics. |
• | Enzyme-linked Immunoassay (PREMIER brand) |
• | Anodic Stripping Voltammetry (LeadCare and PediaStat brands) |
Income Statement Information (Amounts in thousands, except per share data) |
||||||||||||||||||||
For the Year Ended September 30, |
2019 |
2018 |
2017 |
2016 |
2015 |
|||||||||||||||
Net revenues |
$ | 201,014 |
$ | 213,571 |
$ | 200,771 |
$ | 196,082 |
$ | 194,830 |
||||||||||
Gross profit |
118,325 |
130,697 |
124,292 |
127,212 |
121,882 |
|||||||||||||||
Operating income |
32,699 |
31,584 |
37,382 |
51,378 |
56,060 |
|||||||||||||||
Net earnings |
24,382 |
23,849 |
21,557 |
32,229 |
35,540 |
|||||||||||||||
Basic earnings per share |
$ | 0.57 |
$ | 0.56 |
$ | 0.51 |
$ | 0.77 |
$ | 0.85 |
||||||||||
Diluted earnings per share |
$ | 0.57 |
$ | 0.56 |
$ | 0.51 |
$ | 0.76 |
$ | 0.85 |
||||||||||
Cash dividends declared per share |
$ | 0.250 |
$ | 0.500 |
$ | 0.575 |
$ | 0.800 |
$ | 0.800 |
||||||||||
Book value per share |
$ | 4.47 |
$ | 4.14 |
$ | 4.02 |
$ | 3.95 |
$ | 3.96 |
||||||||||
Balance Sheet Information |
||||||||||||||||||||
As of September 30, |
2019 |
2018 |
2017 |
2016 |
2015 |
|||||||||||||||
Current assets |
$ | 144,761 |
$ | 139,053 |
$ | 133,875 |
$ | 126,791 |
$ | 119,422 |
||||||||||
Current liabilities |
20,914 |
24,173 |
22,887 |
22,571 |
15,251 |
|||||||||||||||
Total assets |
325,478 |
251,377 |
249,777 |
252,028 |
183,282 |
|||||||||||||||
Long-term debt obligations |
75,824 |
50,180 |
54,647 |
58,360 |
— |
|||||||||||||||
Shareholders’ equity |
190,967 |
175,418 |
169,585 |
166,472 |
165,873 |
2019 |
2018 |
2017 |
2019 vs. 2018 Inc (Dec) |
2018 vs. 2017 Inc (Dec) |
||||||||||||||||
Gross Profit |
$ | 118,325 |
$ | 130,697 |
$ | 124,292 |
(9 |
%) | 5 |
% | ||||||||||
Gross Profit Margin |
59 |
% | 61 |
% | 62 |
% | -2 points |
-1 point |
Research & Development |
Selling & Marketing |
General & Administrative |
Other |
Total Operating Expenses |
||||||||||||||||
Fiscal 2017: |
||||||||||||||||||||
Diagnostics |
$ | 13,433 |
$ | 22,942 |
$ | 13,268 |
$ | 6,628 |
$ | 56,271 |
||||||||||
Life Science |
2,603 |
9,446 |
7,493 |
— |
19,542 |
|||||||||||||||
Corporate |
— |
— |
10,335 |
762 |
11,097 |
|||||||||||||||
Total 2017 Expenses |
$ |
16,036 |
$ |
32,388 |
$ |
31,096 |
$ |
7,390 |
$ |
86,910 |
||||||||||
Fiscal 2018: |
||||||||||||||||||||
Diagnostics |
$ | 13,742 |
$ | 25,002 |
$ | 19,397 |
$ | 4,032 |
$ | 62,173 |
||||||||||
Life Science |
3,047 |
9,466 |
8,111 |
1,240 |
21,864 |
|||||||||||||||
Corporate |
— |
— |
7,297 |
7,779 |
15,076 |
|||||||||||||||
Total 2018 Expenses |
$ |
16,789 |
$ |
34,468 |
$ |
34,805 |
$ |
13,051 |
$ |
99,113 |
||||||||||
Fiscal 2019: |
||||||||||||||||||||
Diagnostics |
$ | 14,711 |
$ | 23,058 |
$ | 19,191 |
$ | 3,446 |
$ | 60,406 |
||||||||||
Life Science |
3,237 |
5,388 |
6,034 |
188 |
14,847 |
|||||||||||||||
Corporate |
— |
— |
7,777 |
2,596 |
10,373 |
|||||||||||||||
Total 2019 Expenses |
$ |
17,948 |
$ |
28,446 |
$ |
33,002 |
$ |
6,230 |
$ |
85,626 |
||||||||||
Research & Development |
Selling & Marketing |
General & Administrative |
Other |
Total Operating Expenses |
||||||||||||||||
2017 Expenses |
$ |
16,036 |
$ |
32,388 |
$ |
31,096 |
$ |
7,390 |
$ |
86,910 |
||||||||||
% of Revenues |
8 |
% | 16 |
% | 15 |
% | 4 |
% | 43 |
% | ||||||||||
Fiscal 2018 Increases (Decreases): |
||||||||||||||||||||
Diagnostics |
309 |
2,060 |
6,129 |
(2,596 |
) | 5,902 |
||||||||||||||
Life Science |
444 |
20 |
618 |
1,240 |
2,322 |
|||||||||||||||
Corporate |
— |
— |
(3,038 |
) | 7,017 |
3,979 |
||||||||||||||
2018 Expenses |
$ |
16,789 |
$ |
34,468 |
$ |
34,805 |
$ |
13,051 |
$ |
99,113 |
||||||||||
% of Revenues |
8 |
% | 16 |
% | 16 |
% | 6 |
% | 46 |
% | ||||||||||
% Increase |
5 |
% | 6 |
% | 12 |
% | 77 |
% | 14 |
% | ||||||||||
Fiscal 2019 Increases (Decreases): |
||||||||||||||||||||
Diagnostics |
969 |
(1,944 |
) | (206 |
) | (586 |
) | (1,767 |
) | |||||||||||
Life Science |
190 |
(4,078 |
) | (2,077 |
) | (1,052 |
) | (7,017 |
) | |||||||||||
Corporate |
— |
— |
480 |
(5,183 |
) | (4,703 |
) | |||||||||||||
2019 Expenses |
$ |
17,948 |
$ |
28,446 |
$ |
33,002 |
$ |
6,230 |
$ |
85,626 |
||||||||||
% of Revenues |
9 |
% | 14 |
% | 16 |
% | 3 |
% | 43 |
% | ||||||||||
% Increase (Decrease) |
7 |
% | (17 |
%) | (5 |
%) | (52 |
%) | (14 |
%) |
• | Increased Research & Development costs, reflecting the addition of the GenePOC business expenses for the development of the GI and RI panel assays since the June 3, 2019 date of acquisition being more than offset by the decreased expenditures resulting from the timing of product development projects and the clinical trials for our cCMV test in fiscal 2018; |
• | Decreased Selling & Marketing costs due to: (i) the effects of the fiscal 2018 organization streamlining initiatives; and (ii) lower sales commissions resulting from the decrease in sales levels; |
• | Decreased General & Administrative costs, reflecting the effects of the fiscal 2018 organization streamlining initiatives and lower Quality System remediation costs related to our blood-lead manufacturing facility, partially offset by the addition of the GenePOC business expenses, including purchase accounting amortization; and |
• | Decreased restructuring & selected legal costs, along with the effects of the fiscal 2019 acquisition-related costs (reflected within “Other” in the above tables). |
• | Increased Selling & Marketing costs, reflecting increased commission and bonus payments made in connection with the increased revenue levels, along with costs associated with the new branding strategy; |
• | Increased General & Administrative costs due in large part to the cash incentive compensation resulting from the revenue and net earnings results achieved, along with increased Quality System remediation costs related to Magellan; |
• | Increased restructuring costs, reflecting: (i) compensation and benefits for our previous Executive Chairman and CEO throughout fiscal 2018, the period during which we also have the compensation and benefits of a new CEO; and (ii) the costs of terminations and related expenses incurred in connection with realigning our business structure; and |
• | Increased legal costs related to the matters discussed in Item 3. “Legal Proceedings”. |
• | Draws on the revolving credit facility used to fund acquisition of the business of GenePOC and pay off the term loan used to fund the March 2016 acquisition of Magellan (May 2019 – September 2019), bearing interest at a fluctuating rate tied to, at the Company’s option, either the federal funds rate or LIBOR. |
• | Term loan used to fund the acquisition of Magellan (March 2016 – May 2017), bearing interest at an effective rate of 2.76%. |
Total |
Less than 1 Year |
1-3 Years |
4-5 Years |
More than 5 Years |
||||||||||||||||
Operating leases (1) |
$ | 6,567 |
$ | 1,528 |
$ | 3,711 |
$ | 1,145 |
$ | 183 |
||||||||||
Purchase obligations (2) |
14,995 |
14,203 |
737 |
55 |
— |
|||||||||||||||
Acquisition price holdback and contingent consideration (3) |
75,000 |
— |
75,000 |
— |
— |
|||||||||||||||
Uncertain income tax positions liability and interest (4) |
511 |
511 |
— |
— |
— |
|||||||||||||||
Total |
$ | 97,073 |
$ | 16,242 |
$ | 79,448 |
$ | 1,200 |
$ | 183 |
||||||||||
(1) | Meridian and its subsidiaries are parties to a number of operating lease agreements around the world, the majority of which relate to office and warehouse building leases expiring at various dates. |
(2) | Purchase obligations relate primarily to outstanding purchase orders for inventory, including instruments, service items, and research and development activities. These contractual commitments are not in excess of expected production requirements over the next twelve months. |
(3) | Pursuant to the purchase agreement related to the June 3, 2019 acquisition of the business of GenePOC, Meridian’s maximum remaining consideration to be paid totals $75,000. As noted below and detailed in Note 2, “Acquisition of Business of GenePOC” |
(4) | Due to inherent uncertainties in the timing of settlement of tax positions, we are unable to estimate the timing of the effective settlement of these obligations. |
Accounting Policy |
Location Within Consolidated Financial Statements |
Examples of Key Estimate Assumptions | ||
Inventories |
Note 1(f) |
Slow-moving, excess & obsolete inventories | ||
Intangible Assets |
Note 1(h) |
Triggering events and impairment conditions | ||
Revenue Recognition |
Note 1(i) |
Distributor price adjustments and fee accruals | ||
Fair Value Measurements |
Note 1(j) |
Valuation of contingent consideration | ||
Income Taxes |
Note 1(l) and Note 6 |
Uncertain tax positions and state apportionment factors |
35 |
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36 |
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41 |
||||
42 |
||||
43 |
||||
44 |
||||
46 |
||||
47 |
||||
74 |
/s/ Jack Kenny |
/s/ Bryan T. Baldasare | |||
Jack Kenny |
Bryan T. Baldasare | |||
Chief Executive Officer |
Executive Vice President and | |||
November 26, 2019 |
Chief Financial Officer | |||
November 26, 2019 |
• | We tested the design and operating effectiveness of controls relating to management’s calculation and review of the reserve which included verifying the completeness of the input data, mathematical accuracy of the calculation and evaluating the reasonableness of key assumptions used in the calculation. |
• | We tested the reserve calculation prepared by management by performing specific procedures on the key inputs and assumptions such as the monthly sales volume, validity of distributor agreements and applied reserve percentage. The procedures performed are as follows: |
• | We tested the completeness and accuracy of the historical sales (including average selling price) and volume report used in the calculation of the reserve by agreeing total sales to accounting records and tracing a sample of individual sales to supporting audit evidence, such as purchase orders, shipping documents and invoices. |
• | We evaluated the existence and validity of distributor agreements by obtaining a sample of issued credit memos and executed distributor agreements to test compliance with the stated terms in the corresponding agreements. |
• | We analyzed year over year trends in the reserve in comparison with revenue trends to further evaluate reasonableness of the estimate and consistency with expectations. |
• | We tested the design and operating effectiveness of controls relating to the valuation report and allocation of purchase price which included management’s review of the valuation report for the completeness and mathematical accuracy of the data, and evaluating the reasonableness of assumptions used in the calculation such as economic life and discount rate. |
• | We utilized a valuation specialist to assist in evaluating the appropriateness of the Company’s valuation models developed for acquired assets and evaluating the reasonableness of significant assumptions used including the assumed sales growth rate, margin percentages, economic life and discount rate as compared to industry/market data. |
• | We evaluated whether the assumptions used were reasonable by considering past performance of similar technological assets, industry data, current market forecasts, and whether such assumptions were consistent with evidence obtained in other areas of the audit. |
For the Year Ended September 30, |
2019 |
2018 |
2017 |
|||||||||
Net Revenues |
$ |
|
$ |
|
$ |
|
||||||
Cost of Sales |
|
|
|
|||||||||
Gross Profit |
|
|
|
|||||||||
Operating Expenses: |
||||||||||||
Research and development |
|
|
|
|||||||||
Selling and marketing |
|
|
|
|||||||||
General and administrative |
|
|
|
|||||||||
Acquisition-related costs |
|
— |
— |
|||||||||
Restructuring costs |
|
|
|
|||||||||
Selected legal costs |
|
|
|
|||||||||
Goodwill impairment charge |
— |
— |
|
|||||||||
Total operating expenses |
|
|
|
|||||||||
Operating Income |
|
|
|
|||||||||
Other Income (Expense): |
||||||||||||
Interest income |
|
|
|
|||||||||
Interest expense |
( |
) |
( |
) | ( |
) | ||||||
Other, net |
|
( |
) | |
||||||||
Total other expense |
( |
) |
( |
) | ( |
) | ||||||
Earnings Before Income Taxes |
|
|
|
|||||||||
Income Tax Provision |
|
|
|
|||||||||
Net Earnings |
$ |
|
$ |
|
$ |
|
||||||
Earnings Per Share Data: |
||||||||||||
Basic earnings per common share |
$ |
|
$ |
|
$ |
|
||||||
Diluted earnings per common share |
$ |
|
$ |
|
$ |
|
||||||
Common shares used for basic earnings per common share |
|
|
|
|||||||||
Effect of dilutive stock options and restricted share units |
|
|
|
|||||||||
Common shares used for diluted earnings per common share |
|
|
|
|||||||||
Dividends declared per common share |
$ |
|
$ |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
| |||
Anti-dilutive Securities: |
||||||||||||
Common share options and restricted share units |
|
|
|
For the Year Ended September 30, |
2019 |
2018 |
2017 |
|||||||||
Net Earnings |
$ |
$ |
$ |
|||||||||
Other comprehensive income (loss): |
||||||||||||
Foreign currency translation adjustment |
( |
) |
( |
) | ||||||||
Unrealized gain (loss) on cash flow hedge |
( |
) |
||||||||||
Amortization of gain on cash flow hedge |
( |
) |
— |
— |
||||||||
Income taxes related to items of other comprehensive income |
( |
) | ( |
) | ||||||||
Other comprehensive income (loss), net of tax |
( |
) |
( |
) | ||||||||
Comprehensive Income |
$ |
$ |
$ |
|||||||||
For the Year Ended September 30, |
2019 |
2018 |
2017 |
|||||||||
Cash Flows From Operating Activities |
||||||||||||
Net earnings |
$ |
|
$ | |
$ | |
||||||
Non-cash items included in net earnings: |
||||||||||||
Depreciation of property, plant and equipment |
|
|
|
|||||||||
Amortization of intangible assets |
|
|
|
|||||||||
Amortization of deferred instrument costs |
— |
|
|
|||||||||
Stock-based compensation |
|
|
|
|||||||||
Goodwill impairment charge |
— |
— |
|
|||||||||
Deferred income taxes |
( |
) |
( |
) | |
|||||||
Losses on dispositions of long-lived assets |
|
— |
— |
|||||||||
Change in the following, net of acquisition: |
||||||||||||
Accounts receivable |
( |
) |
( |
) | ( |
) | ||||||
Inventories |
|
( |
) | |
||||||||
Prepaid expenses and other current assets |
( |
) |
|
|
||||||||
Accounts payable and accrued expenses |
( |
) |
|
( |
) | |||||||
Income taxes payable |
|
( |
) | ( |
) | |||||||
Other, net |
( |
) |
|
( |
) | |||||||
Net cash provided by operating activities |
|
|
|
|||||||||
Cash Flows From Investing Activities |
||||||||||||
Purchase of property, plant and equipment |
( |
) |
( |
) | ( |
) | ||||||
Disposal s of property, plant and equipment |
|
— |
— |
|||||||||
Acquisition of GenePOC business |
( |
) |
— |
— |
||||||||
Net cash used for investing activities |
( |
) |
( |
) | ( |
) | ||||||
Cash Flows From Financing Activities |
||||||||||||
Dividends paid |
( |
) |
( |
) | ( |
) | ||||||
Proceeds from revolving credit facility |
|
— |
— |
|||||||||
Payment of debt issuance costs |
( |
) |
— |
— |
||||||||
Payments on term loan |
( |
) |
( |
) | ( |
) | ||||||
Proceeds and tax benefits from exercises of stock options |
|
|
|
|||||||||
Payment of acquisition consideration |
— |
( |
) | — |
||||||||
Net cash provided by (used for) financing activities |
|
( |
) | ( |
) | |||||||
Effect of Exchange Rate Changes on Cash and Equivalents and Restricted Cash |
( |
) |
( |
) | |
|||||||
Net Increase in Cash and Equivalents and Restricted Cash |
|
|
|
|||||||||
Cash and Equivalents and Restricted Cash at Beginning of Period |
|
|
|
|||||||||
Cash and Equivalents and Restricted Cash at End of Period |
$ |
|
$ | |
$ | |
||||||
Cash and Equivalents |
$ |
|
$ | |
$ | |
||||||
Restricted Cash |
— |
|
|
|||||||||
Cash and Equivalents and Restricted Cash at End of Period |
$ |
|
$ | |
$ | |
||||||
As of September 30, |
2019 |
2018 |
||||||
Assets |
||||||||
Current Assets: |
||||||||
Cash and equivalents |
$ |
|
$ |
|
||||
Accounts receivable, less allowances of $ |
|
|
||||||
Inventories |
|
|
||||||
Prepaid expenses and other current assets |
|
|
||||||
Total current assets |
|
|
||||||
Property, Plant and Equipment, at Cost: |
||||||||
Land |
|
|
||||||
Buildings and improvements |
|
|
||||||
Machinery, equipment and furniture |
|
|
||||||
Construction in progress |
|
|
||||||
Subtotal |
|
|
||||||
Less: accumulated depreciation and amortization |
|
|
||||||
Net property, plant and equipment |
|
|
||||||
Other Assets: |
||||||||
Goodwill |
|
|
||||||
Other intangible assets, net |
|
|
||||||
Restricted cash |
— |
|
||||||
Deferred instrument costs, net |
— |
|
||||||
Fair value of interest rate swap |
— |
|
||||||
Deferred income taxes |
|
|
||||||
Other assets |
|
|
||||||
Total other assets |
|
|
||||||
Total assets |
$ |
|
$ |
|
||||
As of September 30, |
2019 |
2018 |
||||||
Liabilities and Shareholders’ Equity |
||||||||
Current Liabilities: |
||||||||
Accounts payable |
$ |
$ |
||||||
Accrued employee compensation costs |
||||||||
Other accrued expenses |
||||||||
Current portion of long-term debt |
— |
|||||||
Income taxes payable |
||||||||
Total current liabilities |
||||||||
Non-Current Liabilities: |
||||||||
Acquisition consideration |
— |
|||||||
Post-employment benefits |
||||||||
Long-term debt |
||||||||
Long-term income taxes payable |
||||||||
Deferred income taxes |
||||||||
Total non-current liabilities |
||||||||
Commitments and Contingencies |
||||||||
Shareholders’ Equity: |
||||||||
Preferred stock, |
||||||||
Common shares, |
||||||||
Additional paid-in capital |
||||||||
Retained earnings |
||||||||
Accumulated other comprehensive loss |
( |
) |
( |
) | ||||
Total shareholders’ equity |
||||||||
Total liabilities and shareholders’ equity |
$ |
$ |
||||||
Common Shares Issued |
Additional Paid-in Capital |
Retained Earnings |
Accum Comp Income (Loss) |
Total |
||||||||||||||||
B alance at September 30, 2016 |
|
$ |
|
$ |
|
$ |
( |
) | $ |
|
||||||||||
Cash dividends paid - $ |
— |
— |
( |
) | — |
( |
) | |||||||||||||
Conversion of restricted share units and exercise of stock options |
|
( |
) |
— |
— |
( |
) | |||||||||||||
Stock compensation expense |
— |
|
— |
— |
|
|||||||||||||||
Net earnings |
— |
— |
|
— |
|
|||||||||||||||
Foreign currency translation adjustment |
— |
— |
— |
|
|
|||||||||||||||
Hedging activity, net of tax |
— |
— |
— |
|
|
|||||||||||||||
Balance at September 30, 2017 |
|
|
|
( |
) | |
||||||||||||||
Cash dividends paid - $ |
— |
— |
( |
) | — |
( |
) | |||||||||||||
Conversion of restricted share units and ex ercise of stock options |
|
|
— |
— |
|
|||||||||||||||
Stock compensation expense |
— |
|
— |
— |
|
|||||||||||||||
Net earnings |
— |
— |
|
— |
|
|||||||||||||||
Foreign currency translation adjustment |
— |
— |
— |
( |
) | ( |
) | |||||||||||||
Hedging activity, net of tax |
— |
— |
— |
|
|
|||||||||||||||
Balance at September 30, 2018 |
|
|
|
( |
) |
|
||||||||||||||
Cash dividends paid - $ |
— |
— |
( |
) | — |
( |
) | |||||||||||||
Conversion of restricted share units and exercise of stock options |
|
|
— |
— |
|
|||||||||||||||
Stock compensation expense |
— |
|
— |
— |
|
|||||||||||||||
Net earnings |
— |
— |
|
— |
|
|||||||||||||||
Foreign currency translation adjustment |
— |
— |
— |
( |
) | ( |
) | |||||||||||||
Hedging activity, net of tax |
— |
— |
— |
( |
) | ( |
) | |||||||||||||
Adoption of ASU 2014-09 |
— |
— |
( |
) | — |
( |
) | |||||||||||||
Adoption of ASU 2018-02 |
— |
— |
( |
) | |
— |
||||||||||||||
Balance at September 30, 2019 |
|
$ |
|
$ | |
$ | ( |
) | $ |
|
||||||||||
(1) |
Summary of Significant Accounting Policies |
(a) |
Nature of Business - . |
(b) |
Principles of Consolidation - |
(c) |
Use of Estimates - |
( d ) |
Foreign Currency Translation - Assets and liabilities of foreign operations are translated using year-end |
(e) |
Cash, Cash Equivalents and Investments - A-2, P-2 and F-2, and long-term ratings of at least A, Baa1 and A, by Standard & Poor’s, Moody’s and Fitch, respectively, at the time of purchase. We consider short-term investments with original maturities of 90 days or less to be cash equivalents, including institutional money market funds. At times our investments of cash and equivalents with various high credit quality financial institutions may be in excess of the Federal Deposit Insurance Corporation (FDIC) insurance limit. |
September 30, 2019 |
September 30, 2018 |
|||||||||||||||
Cash and Equivalents |
Other |
Cash and Equivalents |
Other |
|||||||||||||
Institutional money market funds |
$ |
|
$ |
— |
$ | |
$ | — |
||||||||
Cash on hand – |
||||||||||||||||
Restricted |
— |
— |
— |
|
||||||||||||
Unrestricted |
|
— |
|
— |
||||||||||||
Total |
$ |
|
$ |
— |
$ | |
$ |
|
||||||||
(f) |
Inventories first-in, first-out (FIFO) basis. Testing instruments are carried in inventory until they are sold outright or placed with a customer under the customer reagent rental program, at which time they are transferred to property, plant and equipment. |
(g) |
Property, Plant and Equipment write-off the cost over the estimated useful lives, generally as follows: |
(h) |
Intangible Assets - separately-run businesses into two integrated global business units (see Note 3), at September 30, 2019 and September 30, 2018, we had two reporting units (Diagnostics and Life Science), both of which contained goodwill. We review our reporting unit structure annually, or more frequently if facts and circumstances warrant. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. We have |
2019 |
2018 |
|||||||||||||||
As of September 30, |
Gross Carrying Value |
Accum. Amort. |
Gross Carrying Value |
Accum. Amort. |
||||||||||||
Manufacturing technologies, core products and cell lines |
$ |
|
$ |
|
$ | |
$ | |
||||||||
Tradenames, licenses and patents |
|
|
|
|
||||||||||||
Customer lists, customer relationships and supply agreements |
|
|
|
|
||||||||||||
Government grants |
|
|
— |
— |
||||||||||||
$ |
|
$ |
|
$ | |
$ | |
|||||||||
(i) |
Revenue Recognition and Accounts Receivable |
Balance at September 30, 2018 |
New Revenue Standard Adjustment |
Balance at October 1, 2018 |
||||||||||
PROPERTY, PLANT AND EQUIPMENT |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ | |
$ | |
$ | |
||||||
|
( |
) | ( |
) | ( |
) | ||||||
OTHER ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) | — |
||||||||
NON-CURRENT LIABILITIES |
||||||||||||
|
( |
) | |
( |
) | |||||||
SHAREHOLDERS’ EQUITY |
||||||||||||
|
( |
) | |
( |
) |
2019 vs. 2018 |
2018 vs. 2017 |
|||||||||||||||||||
2019 |
2018 |
2017 |
Inc (Dec) |
Inc (Dec) |
||||||||||||||||
Diagnostics- |
||||||||||||||||||||
Americas |
$ |
|
$ |
|
$ |
|
( |
)% | |
% | ||||||||||
EMEA |
|
|
|
— |
% | |
% | |||||||||||||
ROW |
|
|
|
|
% | ( |
)% | |||||||||||||
Total Diagnostics |
|
|
|
( |
)% | |
% | |||||||||||||
Life Science- |
||||||||||||||||||||
Americas |
|
|
|
( |
)% | |
% | |||||||||||||
EMEA |
|
|
|
|
% | |
% | |||||||||||||
ROW |
|
|
|
( |
)% | |
% | |||||||||||||
Total Life Science |
|
|
|
|
% | |
% | |||||||||||||
Consolidated |
$ | |
$ | |
$ | |
( |
)% | |
% | ||||||||||
2019 vs. 2018 |
2018 vs. 2017 |
|||||||||||||||||||
2019 |
2018 |
2017 |
Inc (Dec) |
Inc (Dec) |
||||||||||||||||
Diagnostics- |
||||||||||||||||||||
Molecular assays |
$ | |
$ | |
$ | |
( |
)% | — |
% | ||||||||||
Immunoassays & blood chemistry assays |
|
|
|
( |
)% | |
% | |||||||||||||
Total Diagnostics |
$ |
|
$ |
|
$ |
|
( |
)% |
|
% | ||||||||||
Life Science- |
||||||||||||||||||||
Molecular reagents |
$ | |
$ | |
$ | |
( |
)% | |
% | ||||||||||
Immunological reagents |
|
|
|
|
% | |
% | |||||||||||||
Total Life Science |
$ | |
$ | |
$ | |
|
% | |
% | ||||||||||
2019 vs. 2018 |
2018 vs. 2017 |
|||||||||||||||||||
2019 |
2018 |
2017 |
Inc (Dec) |
Inc (Dec) |
||||||||||||||||
Diagnostics- |
||||||||||||||||||||
Gastrointestinal assays |
$ | |
$ | |
$ | |
( |
)% | — |
% | ||||||||||
Respiratory illness assays |
|
|
|
( |
)% | |
% | |||||||||||||
Blood chemistry assays |
|
|
|
— |
% | |
% | |||||||||||||
Other |
|
|
|
( |
)% | |
% | |||||||||||||
Total Diagnostics |
$ | |
$ | |
$ | |
( |
)% | |
% | ||||||||||
(j) |
Fair Value Measurements – 820-10, Fair Value Measurements and Disclosures 820-10 defines fair value as the price that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820-10 requires a three level hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy level assigned to each asset and liability is based on the assessment of the transparency and reliability of the inputs used in the valuation of such items at the measurement date based on the lowest level of input that is significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). |
Fair Value Measurements Using Inputs Considered as |
||||||||||||||||
As of September 31, 2019 |
Carrying Value |
Level 1 |
Level 2 |
Level 3 |
||||||||||||
Contingent consideration |
$ |
|
$ |
|
$ |
|
$ |
|
(k) |
Research and Development Costs . |
(l) |
Income Taxes |
(m) |
Stock-Based Compensation |
(n) |
Comprehensive Income (Loss) |
(o) |
Shipping and Handling Costs |
(p) |
Non-Income Government-Assessed Taxes |
(q) |
Recent Accounting Pronouncements |
(r) |
Reclassifications - Certain reclassifications have been made to the prior fiscal year financial statements to conform to the current year presentation. Such reclassifications had no impact on net earnings or shareholders’ equity. |
(2) |
Acquisition of Business of GenePOC |
(i) | a $ |
|
|
|
(ii) | two $ |
(iii) | up to $ |
PRELIMINARY |
||||||||||||
June 3, 2019 (as initially reported) |
Measurement Period Adjustments |
June 3, 2019 (as adjusted) |
||||||||||
Fair value of assets acquired - |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Inventories |
|
( |
) | |
||||||||
Other current assets |
|
|
|
|||||||||
Property, plant and equipment |
|
( |
) | |
||||||||
Goodwill |
|
|
|
|||||||||
Other intangible assets (estimated useful life): |
||||||||||||
License agreement ( |
|
— |
|
|||||||||
Technology ( |
|
|
|
|||||||||
Government grant ( |
|
— |
|
|||||||||
|
— |
|
||||||||||
Fair value of liabilities assumed - |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
( |
) | |
||||||||
Total consideration paid (including contingent consideration currently estimated at $ |
$ | |
$ | |
$ | |
||||||
Year Ended September 30, |
2019 |
2018 |
||||||
Net Revenues |
$ |
|
$ | |
||||
Net Earnings |
$ |
|
$ | |
Year Ended September 30, |
2019 |
2018 |
||||||
Adjustments to Net Revenues |
||||||||
GenePOC pre-acquisition revenues |
$ |
|
$ | |
||||
Adjustments to Net Earnings |
||||||||
GenePOC pre-acquisition net loss |
$ |
( |
) |
$ | ( |
) | ||
Pro forma adjustments: |
||||||||
Meridian acquisition-related costs |
|
— |
||||||
|
|
— |
||||||
non-continuing personnel, locationsor activities |
|
|
||||||
|
( |
) |
( |
) | ||||
|
( |
) |
( |
) | ||||
|
( |
) |
|
|||||
Total Adjustments to Net Earnings |
$ |
( |
) |
$ | ( |
) | ||
(3) |
Restructuring |
2019 |
2018 |
|||||||
Severance, other termination benefits and related costs |
$ |
|
$ | |
||||
Lease and other contract termination fees |
|
|
||||||
Loss on fixed asset disposals and inventory scrap |
|
|
||||||
Other |
|
|
||||||
Total |
$ |
|
$ | |
||||
As of September 30, |
2019 |
2018 |
||||||
Severance, other termination benefits and related costs |
$ |
$ | ||||||
Lease and other contract termination fees |
||||||||
Other |
||||||||
Total |
$ |
$ | ||||||
(4) |
Inventories |
As of September 30, |
2019 |
2018 |
||||||
Raw materials |
$ |
$ | ||||||
Work-in-process |
||||||||
Finished goods - instruments |
||||||||
Finished goods - kits and reagents |
||||||||
Total |
$ |
$ | ||||||
(5) |
Bank Credit Arrangements |
(6) |
Income Taxes |
(a) | Earnings before income taxes, and the related provision for income taxes for the years ended September 30, 2019, 2018 and 2017 were as follows: |
Year Ended September 30, |
2019 |
2018 |
2017 |
|||||||||
Domestic |
$ |
$ | $ | |||||||||
Foreign |
||||||||||||
Total earnings before income taxes |
$ |
$ | $ | |||||||||
Provision (credit) for income taxes - |
||||||||||||
Federal - |
||||||||||||
Current |
$ |
$ | $ | |||||||||
Temporary differences |
||||||||||||
Fixed asset basis differences and depreciation |
( |
) | ||||||||||
Intangible asset basis differences and amortization |
( |
) |
( |
) | ( |
) | ||||||
Currently non-deductible expenses and reserves |
||||||||||||
Stock-based compensation |
( |
) |
( |
) | ||||||||
Net operating loss carryforwards utilized |
||||||||||||
Tax credit carryforwards utilized |
— |
|||||||||||
Other, net |
( |
) |
( |
) | ||||||||
Subtotal |
||||||||||||
State and local |
||||||||||||
Foreign |
||||||||||||
Total income tax provision |
$ |
$ | $ | |||||||||
(b) | The following is a reconciliation between the statutory U.S. income tax rate and the effective rate derived by dividing the provision for income taxes by earnings before income taxes: |
Year Ended September 30, |
2019 |
2018 |
2017 |
||||||||||||||||||||||
Computed income taxes at statutory rate |
$ |
% |
$ |
% | $ |
% | |||||||||||||||||||
Increase (decrease) in taxes resulting from - |
|||||||||||||||||||||||||
State and local income taxes |
|||||||||||||||||||||||||
U.S. tax law change |
— |
— |
( |
) | ( |
) | — |
— |
|||||||||||||||||
One-time repatriation tax |
— |
— |
— |
— |
|||||||||||||||||||||
Foreign-Derived Intangible Income tax |
( |
) |
( |
) |
— |
— |
— |
— |
|||||||||||||||||
Global Intangible Low Taxed Income tax |
— |
— |
— |
— |
|||||||||||||||||||||
Foreign tax credit |
( |
) |
( |
) |
( |
) |
— |
( |
) |
( |
) | ||||||||||||||
Foreign tax rate differences |
( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||
Qualified domestic production incentives |
— |
— |
( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||
Uncertain tax position activity |
( |
) | ( |
) | |||||||||||||||||||||
Goodwill impairment charge |
— |
— |
— |
— |
|||||||||||||||||||||
Valuation allowance |
( |
) |
( |
) |
— |
— |
|||||||||||||||||||
Stock-based compensation |
( |
) |
( |
) |
— |
— |
|||||||||||||||||||
Other, net |
( |
) |
( |
) |
( |
) | ( |
) | |||||||||||||||||
$ |
% |
$ |
% | $ |
% | ||||||||||||||||||||
(c) |
The components of net deferred tax liabilities were as follows: |
As of September 30, |
2019 |
2018 |
||||||
Deferred tax assets - |
||||||||
Valuation reserves and non-deductible expenses |
$ |
$ |
||||||
Stock compensation expense not deductible |
||||||||
Net operating loss and tax credit carryforwards |
||||||||
Basis difference in equity-method investee |
||||||||
Inventory basis differences |
||||||||
Other |
( |
) | ||||||
Subtotal |
||||||||
Less valuation allowance |
( |
) |
( |
) | ||||
Deferred tax assets |
||||||||
Deferred tax liabilities - |
||||||||
Fixed asset basis differences and depreciation |
( |
) |
( |
) | ||||
Intangible asset basis differences and amortization |
( |
) |
( |
) | ||||
Deferred tax liabilities |
( |
) |
( |
) | ||||
Net deferred tax liabilities |
$ |
( |
) |
$ |
( |
) | ||
2019 |
2018 |
|||||||
Unrecognized income tax benefits at beginning of year |
$ |
$ |
||||||
Additions for tax positions of prior years |
— |
|||||||
Reductions for tax positions of prior years |
( |
) |
— |
|||||
Additions for tax positions of current year |
— |
|||||||
Tax examination and other settlements |
— |
( |
) | |||||
Expiration of statute of limitations |
— |
( |
) | |||||
Unrecognized income tax benefits at end of year |
$ |
$ |
||||||
(7) |
Employee Benefits |
(a) |
Savings and Investment Plan |
(b) |
Stock-Based Compensation Plans |
Year ended September 30, |
2019 |
2018 |
2017 |
|||||||||
Risk-free interest rates |
|
% |
|
% | |
% | ||||||
Dividend yield |
|
% |
|
% | |
% | ||||||
Life of option |
|
|
|
|||||||||
Share price volatility |
|
% |
|
% | |
% | ||||||
Forfeitures (by employee group) |
|
% |
|
% |
|
% |
Options |
Wtd Avg Exercise Price |
Wtd Avg Remaining Life (Yrs) |
Aggregate Intrinsic Value |
|||||||||||||
Outstanding beginning of period |
|
$ | |
|||||||||||||
Grants |
|
|
||||||||||||||
Exercises |
( |
) | |
|||||||||||||
Forfeitures |
( |
) | |
|||||||||||||
Cancellations |
( |
) | |
|||||||||||||
Outstanding end of period |
|
$ | |
|
$ | |
||||||||||
Exercisable end of period |
|
$ | |
|
$ | — |
||||||||||
Options |
Weighted- Average Grant Date Fair Value |
|||||||
Nonvested beginning of period |
|
$ | |
|||||
Granted |
|
|
||||||
Vested |
( |
) | |
|||||
Forfeitures |
( |
) | |
|||||
Nonvested end of period |
|
$ | |
|||||
(8) |
Non-Current Liabilities |
(9) |
Reportable Segments and Major Concentration Data |
Year Ended September 30, |
2019 |
2018 |
2017 |
|||||||||||||||||||||
Customer A |
$ |
|
|
( |
)% |
$ | |
( |
)% | $ | |
( |
)% | |||||||||||
Customer B |
$ |
|
|
( |
)% |
$ | |
( |
)% | $ | |
( |
)% |
Year Ended September 30, |
2019 |
2018 |
2017 |
|||||||||
United States |
$ |
|
$ |
|
$ |
|
||||||
Italy |
|
|
|
|||||||||
France |
|
|
|
|||||||||
United Kingdom |
|
|
|
|||||||||
Puerto Rico |
|
|
|
|||||||||
Japan |
|
|
|
|||||||||
Belgium |
|
|
|
|||||||||
Holland |
|
|
|
|||||||||
Other countries |
|
|
|
|||||||||
Total Diagnostics |
$ |
|
$ |
|
$ |
|
||||||
Year Ended September 30, |
2019 |
2018 |
2017 |
|||||||||
United States |
$ |
|
|
$ |
|
|||||||
Germany |
|
|
|
|||||||||
China |
|
|
|
|||||||||
United Kingdom |
|
|
|
|||||||||
Spain |
|
|
|
|||||||||
Australia |
|
|
|
|||||||||
France |
|
|
|
|||||||||
Japan |
|
|
|
|||||||||
Italy |
|
|
|
|||||||||
South Korea |
|
|
|
|||||||||
Other countries |
|
|
|
|||||||||
Total Life Science |
$ |
|
$ |
|
$ |
|
||||||
Diagnostics |
Life Science |
Corporate (1) |
Eliminations (2) |
Total |
||||||||||||||||
Fiscal 2019 |
||||||||||||||||||||
Net revenues - |
||||||||||||||||||||
Third-party |
$ | |
$ | |
$ | — |
$ |
— |
$ | |
||||||||||
Inter-segment |
|
|
— |
( |
) | — |
||||||||||||||
Operating income |
|
|
( |
) | |
|
||||||||||||||
Depreciation and amortization |
|
|
— |
— |
|
|||||||||||||||
Capital expenditures |
|
|
— |
— |
|
|||||||||||||||
Goodwill |
|
|
— |
— |
|
|||||||||||||||
Other intangible assets, net |
|
|
— |
— |
|
|||||||||||||||
Total assets |
|
|
— |
( |
) | |
||||||||||||||
Fiscal 2018 |
||||||||||||||||||||
Net revenues - |
||||||||||||||||||||
Third-party |
$ | |
$ | |
$ | — |
$ | — |
$ | |
||||||||||
Inter-segment |
|
|
— |
( |
) | — |
||||||||||||||
Operating income |
|
|
( |
) | |
|
||||||||||||||
Depreciation and amortization |
|
|
— |
— |
|
|||||||||||||||
Capital expenditures |
|
|
— |
— |
|
|||||||||||||||
Goodwill |
|
|
— |
— |
|
|||||||||||||||
Other intangible assets, net |
|
|
— |
— |
|
|||||||||||||||
Total assets |
|
|
— |
|
|
|||||||||||||||
Fiscal 2017 |
||||||||||||||||||||
Net revenues - |
||||||||||||||||||||
Third-party |
$ | |
$ | |
$ | — |
$ | — |
$ | |
||||||||||
Inter-segment |
|
|
— |
( |
) | — |
||||||||||||||
Operating income |
|
|
( |
) |
|
|
||||||||||||||
Depreciation and amortization |
|
|
— |
— |
|
|||||||||||||||
Capital expenditures |
|
|
— |
— |
|
|||||||||||||||
Goodwill |
|
|
— |
— |
|
|||||||||||||||
Other intangible assets, net |
|
|
— |
— |
|
|||||||||||||||
Total assets |
|
|
— |
( |
) | |
(1) |
Includes Restructuring and Selected Legal Costs of $ |
(2) |
Eliminations consist of inter-segment transactions. |
Year Ended September 30, |
2019 |
2018 |
2017 |
|||||||||
Segment operating income |
$ |
|
$ | |
$ | |
||||||
Corporate expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest income |
|
|
|
|||||||||
Interest expense |
( |
) |
( |
) | ( |
) | ||||||
Other, net |
|
( |
) | |
||||||||
Consolidated earnings before income taxes |
$ |
|
$ | |
$ | |
||||||
(10) |
Commitments and Contingencies |
(a) |
Royalty Commitments - as-earned basis and recorded in the year earned as a component of cost of sales. Annual royalty expenses associated with these agreements were approximately $ |
(b) |
Purchase Commitments - 3 . 3 . |
(c) |
Operating Lease Commitments - |
(d) |
Acquisition Price Holdback and Contingent Consideration - |
(e) |
Litigation - |
(f) |
Indemnifications - |
(11) |
Quarterly Financial Data (Unaudited) |
For the Quarter Ended in Fiscal 2019 |
December 31 |
March 31 |
June 30 |
September 30 |
||||||||||||
Net revenues |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Gross profit |
|
|
|
|
||||||||||||
Net earnings |
|
|
|
|
||||||||||||
Basic earnings per common share |
|
|
|
|
||||||||||||
Diluted earnings per common share |
|
|
|
|
||||||||||||
Cash dividends per common share |
|
|
— |
— |
||||||||||||
For the Quarter Ended in Fiscal 2018 |
December 31 |
March 31 |
June 30 |
September 30 |
||||||||||||
Net revenues |
$ | |
$ | |
$ | |
$ | |
||||||||
Gross profit |
|
|
|
|
||||||||||||
Net earnings |
|
|
|
|
||||||||||||
Basic earnings per common share |
|
|
|
|
||||||||||||
Diluted earnings per common share |
|
|
|
|
||||||||||||
Cash dividends per common share |
|
|
|
|
||||||||||||
(a) | (1) and (2) FINANCIAL STATEMENTS AND SCHEDULES. |
(b) | (3) EXHIBITS. |
Exhibit Number |
Description of Exhibit | |||
3.1 |
||||
3.2 |
||||
4.1 |
||||
10.1* |
||||
10.2* |
||||
10.3* |
||||
10.4* |
||||
10.5* |
||||
10.6* |
||||
10.7* |
||||
10.8* |
||||
10.9** |
10.10** |
||||
10.11** |
||||
10.12* |
||||
10.13* |
||||
10.14* |
||||
10.15* |
||||
14 |
||||
21 |
||||
23 |
||||
31.1 |
||||
31.2 |
||||
32*** |
||||
101.INS |
Inline XBRL Instance Document | |||
101.SCH |
Inline XBRL Taxonomy Extension Schema | |||
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase | |||
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase | |||
101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase | |||
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase | |||
104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Management Compensatory Contracts |
** | Schedules to and certain portions of these exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The omitted information is not material and would likely cause competitive harm to the Registrant if publicly disclosed. The Registrant hereby agrees to furnish a copy of any omitted schedule or other portion to the SEC upon request. |
*** | Furnished, not filed. |
MERIDIAN BIOSCIENCE, INC. | ||
By: |
/s/ Jack Kenny | |
Date: November 26, 2019 | ||
Jack Kenny | ||
Chief Executive Officer |
Signature |
Capacity |
Date | ||
/s/ Jack Kenny |
Chief Executive Officer and Director |
November 26, 2019 | ||
Jack Kenny |
||||
/s/ Bryan T. Baldasare |
Executive Vice President, Chief |
November 26, 2019 | ||
Bryan T. Baldasare |
Financial Officer and Secretary (Principal Financial and Accounting Officer) |
|||
/s/ David C. Phillips |
Chairman of the Board |
November 26, 2019 | ||
David C. Phillips |
||||
/s/ James M. Anderson |
Director |
November 26, 2019 | ||
James M. Anderson |
||||
/s/ Dwight E. Ellingwood |
Director |
November 26, 2019 | ||
Dwight E. Ellingwood |
||||
/s/ John C. McIlwraith |
Director |
November 26, 2019 | ||
John C. McIlwraith |
||||
/s/ John M. Rice, Jr. |
Director |
November 26, 2019 | ||
John M. Rice, Jr. |
||||
/s/ Catherine A. Sazdanoff |
Director |
November 26, 2019 | ||
Catherine A. Sazdanoff |
||||
/s/ Felicia Williams |
Director |
November 26, 2019 | ||
Felicia Williams |
Description |
Balance at Beginning of Period |
Charged to Costs and Expenses |
Deductions |
Other (a) |
Balance at End of Period |
|||||||||||||||
Year Ended September 30, 2019: |
||||||||||||||||||||
Allowance for doubtful accounts |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||
Inventory realizability reserves |
( |
) | ( |
) | ||||||||||||||||
Valuation allowances – deferred taxes |
— |
— |
||||||||||||||||||
Year Ended September 30, 2018: |
||||||||||||||||||||
Allowance for doubtful accounts |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||
Inventory realizability reserves |
( |
) | ( |
) | ||||||||||||||||
Valuation allowances – deferred taxes |
— |
( |
) | — |
||||||||||||||||
Year Ended September 30, 2017: |
||||||||||||||||||||
Allowance for doubtful accounts |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
Inventory realizability reserves |
( |
) | ||||||||||||||||||
Valuation allowances – deferred taxes |
— |
— |
— |
(a) | Balances reflect the effects of currency translation. |