<PAGE>
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 June 30, 1995
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 Diagnostics, 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 the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Outstanding at June 30,
Class 1995
_________________________ _______________________
Common stock, no par value 8,233,131
__________________________ _______________________
Page 1 of 18
Exhibit Index on page 14
<PAGE>
MERIDIAN DIAGNOSTICS, INC.
AND SUBSIDIARIES
Index to Quarterly Report on Form 10-Q
Page(s)
_______
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements-
Consolidated Balance Sheets - June 30, 1995
and September 30, 1994 3-4
Consolidated Statements of Earnings -
Three Months Ended June 30, 1995 and 1994 and
Nine Months Ended June 30, 1995 and 1994 5
Consolidated Statements of Cash Flows - Nine Months
Ended June 30, 1995 and 1994 6
Notes to Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 5. Other Information 12-13
Item 6. Exhibits and Reports on Form 8-K 14
Signature 14
Exhibit 11 15
Exhibit 27 16-18
<PAGE>
Meridian Diagnostics, Inc.
and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
ASSETS
June 30, September 30,
1995 1994
____________ _____________
CURRENT ASSETS:
Cash and short-term
investments $ 9,109,122 $ 8,831,983
Trade accounts receivable,
less allowance of
$233,180 and $113,000
for doubtful accounts 5,975,274 5,169,989
Inventories 3,008,669 3,020,071
Prepaid expenses and other 511,506 108,423
Deferred income tax
benefits 329,200 282,929
__________ __________
Total current assets 18,933,771 17,413,395
__________ __________
PROPERTY, PLANT AND
EQUIPMENT:
Land 267,803 273,6 88
Buildings and improvements 5,815,664 3,716,649
Machinery, equipment and
furniture 4,852,449 4,595,550
Construction in progress 117,256 1,063,702
________ _________
11,053,172 9,649,589
Less- Accumulated
depreciation and
amortization
(4,552,290) (4,248,561)
__________ __________
Net property, plant and
equipment 6,500,882 5,401,028
_________ _________
OTHER ASSETS:
Deferred income tax
benefits 326,400 59,841
Deferred debenture offering
costs, net of accumulated
amortization of $168,357
and $96,876 594,114 665,595
Covenants not to compete,
net of accumulated
amortization of $1,705,133
and $1,337,375 2,555,461 2,923,219
License agreements, net of
accumulated amortization of
$758,045 and $714,878 377,068 420,235
Patents, trade names,
customer lists and
distributorships, net of
accumulated amortization of
$423,663 and $267,365 1,889,337 2,045,635
Other intangible assets,
net of accumulated
amortization of $75,053 and
$43,503 641,047 685,218
Costs in excess of net
assets acquired, net of
accumulated amortization of
$405,893 and $255,753 2,651,100 2,714,964
__________ __________
9,034,527 9,514,707
__________ _________
Total assets $34,469,180 $32,329,130
___________ ___________
___________ ___________
<PAGE>
Meridian Diagnostics, Inc.
and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
____________________________________
June 30 September 30,
1995 1994
__________ ________________
CURRENT LIABILITIES:
Current portion of
long-term
obligations $ 366,760 $ 367,969
Accounts payable 736,845 1,843,489
Accrued payroll and
payroll taxes 698,782 650,530
Other accrued
expenses 1,492,744 649,732
Income taxes
payable 726,882 902,069
__________ _________
Total
current
liabilities 4,022,013 4,413,789
__________ __________
LONG-TERM OBLIGATIONS 15,649,104 14,683,369
__________ __________
SHAREHOLDERS' EQUITY:
Preferred stock, no
par value,
1,000,000 shares
authorized; none
issued - -
Common stock, no
par value,
25,000,000 shares
authorized;
8,233,131 and
8,195,290 shares
issued and
outstanding,
respectively 1,204,929 1,179,583
Additional paid-in
capital 10,999,584 10,824,012
Retained earnings 2,914,064 1,448,736
Foreign currency
translation
adjustment (320,514) (220,359)
__________ __________
Total
share-
holders'
equity 14,798,063 13,231,972
__________ __________
Total
liabilities
and share-
holders
equity $34,469,180 $32,329,130
___________ ___________
___________ ___________
<PAGE>
Meridian Diagnostics, Inc.
and Subsidiaries
Consolidated Statements of Earnings
(Unaudited)
Three Months Ended Nine Months Ended
June 30 June 30
__________________ __________________
1995 1994 1995 1994
____ ____ ____ ____
NET SALES $6,782,312 $5,717,070 $18,356,729 $15,233,148
COST OF SALES 2,257,382 2,032,553 6,079,338 5,504,846
__________ __________ __________ __________
Gross profit 4,524,930 3,684,517 12,277,391 9,728,302
_________ __________ __________ _________
OPERATING
EXPENSES:
Research and
development 370,062 363,563 1,083,284 1,031,430
Selling and
marketing 1,402,647 1,168,480 3,823,591 3,392,075
General and
administrative 903,057 946,633 2,850,369 2,355,891
__________ __________ __________ _________
Total operating
expenses 2,675,766 2,478,676 7,757,244 6,779,396
_________ _________ __________ __________
Operating income 1,849,164 1,205,841 4,520,147 2,948,906
_________ _________ __________ __________
OTHER INCOME
(EXPENSE):
Licensing and
commission fees 26,403 - 92,806 -
Investment income 110,964 54,525 306,904 177,484
Interest expense
and amortization
of debt expenses (295,785) (285,071) (857,268) (808,994)
Other (30,329) 3,428 (25,949) (218)
_________ _________ _________ __________
Total other
income (expense) (188,747) (227,118) (483,507) (631,728)
_________ ________ ________ __________
Earnings before
income taxes 1,660,417 978,723 4,036,640 2,317,178
INCOME TAXES 675,136 375,255 1,676,023 903,699
_________ ________ _________ _________
Net earnings $ 985,281 $ 603,468 $2,360,617 $1,413,479
_________ _________ _________ _________
_________ _________ _________ _________
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 8,225,910 8,191,097 8,208,458 8,181,464
_________ _________ _________ _________
_________ _________ _________ _________
EARNINGS PER
COMMON SHARE $ .12 $ .07 $ .29 $ .17
_________ _________ _________ _________
_________ _________ _________ _________
<PAGE>
Meridian Diagnostics, Inc.
and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
June 30,
_______________________
1995 1994
__________ __________
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net earnings $2,360,617 $1,413,479
Noncash items-
Depreciation of property, plant
and equipment 718,067 523,860
Amortization of intangible
assets 705,079 795,234
Deferred interest expense 41,660 57,904
Deferred income taxes (312,830) (138,335)
Changes in other current assets
and current liabilities-
Accounts receivable, net (887,015) (1,299,132)
Inventories (862) (618,506)
Prepaid expenses and other (404,536) (19,242)
Accounts payable (1,098,367) 1,249,202
Accrued expenses 912,749 498,492
Income taxes payable (150,015) 268,320
_________ _________
Net cash provided by (used
for) operating activities 1,884,547 2,731,276
_________ _________
CASH FLOWS FROM INVESTING
ACTIVITIES:
Property, plant and equipment
acquired, net (1,859,348) (1,011,726)
Product line acquisition-
Equipment - (655,000)
Covenants not to compete - (1,101,550)
Patents, trade names, customer
list and other - (1,375,000)
Cost in excess of net assets
acquired - (266,473)
Proceeds from sale of product
line - 500,000
Acquisition of license agreement - (55,898)
Advance royalty paid - (25,000)
_________ __________
Net cash used for investing
activities (1,859,348) (3,990,647)
_________ _________
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayment of long-term
obligations (282,808) (195,584)
Proceeds from long-term
obligations 1,407,334 369,434
Dividends paid (895,289) (669,535)
Proceeds from issuance of common
stock, net 40,918 44,027
Effect of exchange rate changes
on cash (18,215) 26,977
________ _________
Net cash provided by (used for)
financing activities 251,940 (424,681)
_________ _________
NET INCREASE (DECREASE) IN CASH
AND SHORT-TERM INVESTMENTS 277,139 (1,684,052)
CASH AND SHORT-TERM INVESTMENTS
AT BEGINNING OF PERIOD 8,831,983 9,475,592
_________ _________
CASH AND SHORT-TERM INVESTMENTS
AT END OF PERIOD $9,109,122 $7,791,540
_________ _________
_________ _________
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during the period for-
Income taxes $2,110,761 $ 749,600
_________ _________
_________ _________
Interest $ 538,145 $ 808,994
_________ _________
_________ _________
Non-cash activities-
Estimated contingent
consideration related to
product line acquisitions - $1,991,000
_________ _________
_________ _________
Common stock issued from
conversion of subordinated
debentures $ 160,000 $ -
_________ _________
_________ _________
<PAGE>
Meridian Diagnostics, Inc.
and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
(1) Basis of Presentation-
______________________
The consolidated financial statements included herein
have not been examined by independent public accountants, but
include all adjustments (consisting of normal recurring
entries) which are, in the opinion of management, necessary
for a fair presentation of the results for such periods.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been omitted
pursuant to the requirements of the Securities and Exchange
Commission, although the Company believes that the disclosures
included in these financial statements are adequate to make
the information not misleading.
It is suggested that these consolidated financial
statements be read in conjunction with the consolidated
financial statements and notes thereto included in the
Company's latest annual report on Form 10-K.
The results of operations for the interim periods are not
necessarily indicative of the results to be expected for the
year.
(2) Inventories-
____________
Inventories are comprised of the following:
June 30, 1995 September 30, 1994
___________ _________________
Raw materials $1,221,036 $1,354,412
Work-in-process 907,146 649,205
Finished goods 880,487 1,016,454
__________ __________
$3,008,669 $3,020,071
__________ __________
__________ __________
<PAGE>
(3) Income Taxes-
_____________
The provisions for income taxes were computed at the
estimated annualized effective tax rates utilizing current tax
law in effect, after giving effect to research and
experimentation credits.
(4) Earnings Per Common Share-
__________________________
Net earnings per share has been computed based upon the
weighted average number of shares outstanding during the
periods. No material dilution results from outstanding stock
options, the only common stock equivalents, nor convertible
subordinated debentures. All share and per share information
have been adjusted for a 3% stock dividend in December 1993
and a 3% stock dividend in November 1994.
(5) Translation of Foreign Currency-
________________________________
Assets and liabilities of foreign operations are
translated using quarterend exchange rates, and revenues and
expenses are translated using exchange rates prevailing during
the year with gains or losses resulting from translation
included in a separate component of shareholders equity.
Gains and losses resulting from transactions in foreign
currencies were immaterial.
<PAGE>
Item 2. Management s Discussion and Analysis Of Financial
Condition and Results of Operations
Results of Operations
_____________________
Net sales increased $1,065,000, or 19%, to $6,782,000 for the
third fiscal quarter and $3,124,000, or 21%, to $18,357,000
for the nine months ended June 30, 1995. The increase for the
quarter is primarily attributable to unit volume growth in the
Premier and ImmunoCard(R) product lines plus OEM sale of
Epstein Barr Virus while the increase for the nine month
period is mainly from volume growth in the Premier,
ImmunoCard(R), Merifluor, mononucleosis lines plus OEM sales
(Epstein Barr Virus). The major growth areas are in those
tests used for identification of infectious diseases such as
c. difficile/Toxin A, mononucleosis, mycloplasma and Herpes
simplex virus.
For the third fiscal quarter the increase in sales of
$1,065,000, or 19%, was comprised of volume of $1,024,000 or
18%, price of $88,000, or 2%, and currency of ($47,000) or
(1%). For the nine-month period, the increase of $3,124,000,
or 21%, was comprised of volume of $3,029,000, or 20%, price
of $65,000, or 1% and currency of $30,000.
European sales for the third quarter increased from $1,121,000
to $1,361,000, or 21%, and increased from $2,910,000 to
$3,829,000, or 32%, for the nine-month period. The increase
by product category was attributable to continued strong unit
growth in the mononucleosis line, up 22%; Premier, up 41%
(Toxin A., H. pylori and sales of EHEC - introduced last
quarter); ImmunoCard(R) which more than tripled largely from
new products (mycoplasma, mononucleosis, rotavirus and H.
pylori); and ParaPak(R), up 18%. Most of the increase for the
quarter is attributable to volume, $213,000, with price
contributing $73,000 and currency down $46,000. Through nine
months, the increase in net sales was also largely accounted
for by volume, $666,000, followed by price, $223,000 and
currency of $30,000.
Gross profit as a percentage of net sales improved to 66.7%
for the third fiscal quarter and to 66.9% for the nine-month
period ended June 30, 1995, versus the prior year comparable
periods due primarily to the transfer and in-house manufacture
of the product lines acquired from Ortho Diagnostics System,
Inc. (ODSI) in June 1993 and January 1994. Prior to October
1994, all of these products were purchased under a supply
agreement with Ortho. Fiscal 1994 costs also included the
costs of integrating the Ortho infectious disease product line
into Meridian s manufacturing facilities in Cincinnati.
Total operating expenses increased $197,000, or 8%, for the
third fiscal quarter and $978,000 or 14% for the nine months
ended June 30, 1995, compared to the prior year. Total
operating expenses were 39.4% of net sales for the third
quarter, down 3.9 points from the prior year, and down 2.2
points to 42.2% of sales for the nine months.
Research and development expenses for the third fiscal quarter
were marginally higher than the prior year and up 5% for the
nine month period, primarily from higher personnel cost,
contract research and consumable materials. Selling and
marketing expenses increased 20% for the third quarter and 13%
for the nine months. The increases are attributable to
increased personnel costs in the U.S. and Europe, amortization
of the purchase price of the Ortho infectious disease product
line acquisition in January 1994, and higher convention,
meeting and sample expense. General and administrative
expenses decreased 5% for the third quarter and increased 21%
for the nine-month period. The primary factors accounting for
the increase in the nine months expenses are increased
personnel costs in the U.S. and Europe due to the higher level
of business, higher depreciation, and a general increase in
the provision for doubtful accounts to reflect added coverage
given the increasing sales level. The decrease in the quarter
is a result of a provision last year for a distributor who
filed a petition for reorganization under Chapter 11,
decreases in consulting fees, international travel, and
insurance expenses.
Operating income as a result of the above increased $643,000,
or 53%, for the third fiscal quarter and $1,571,000 or 53%,
for the nine months, respectively, compared to the same
periods last year. As a percent of sales, operating income
improved 6 and 5 points, respectively.
Other expenses decreased $38,000, or 17%, for the quarter and
$148,000, or 23%, for the nine months due to higher investment
income stemming from an improvement in interest rates compared
to last year, plus commission income related to the sale of
certain tissue culture products acquired from Ortho
Diagnostics and sold to VAI Diagnostics, Inc. in March 1994.
Gains/losses in foreign exchange were not material during the
periods. The cumulative foreign currency translation
adjustment changed by $59,000 during the quarter as a result
of the U.S. dollar softening against the Lira during the
period.
The Company s effective tax rate is up approximately 2.5
points for the quarter and for the nine-month period compared
to the prior year as a result of higher operating results of
the Company s European subsidiary which is taxed at a
significantly higher rate than the U.S. domestic tax rate.
Liquidity and Capital Resources
_______________________________
In January 1994, the Company acquired a product line from an
affiliate of ODSI comprised of products used primarily for the
detection of certain infectious diseases including Chlamydia,
Herpes and various viral respiratory infections. The Company
also acquired inventory, equipment, certain license rights, a
trademark, customer lists, a noncompetition agreement and
technical information for the manufacture of the products.
The Company paid $3,382,000 including expenses which were
funded primarily from the proceeds of the debentures issued in
September 1993 and operating cash flow. As additional
consideration, Meridian agreed to pay to the seller up to 6%
of product sales made during the nine-year period beginning in
January 1995. The Company has recorded the estimated present
value of this additional consideration.
<PAGE>
In a separate agreement dated March 14, 1994, the Company sold
to VAI Diagnostics, Inc. certain tissue culture products and
assets acquired in January 1994 from the affiliate of OSDI
mentioned above. The $650,000 proceeds consisted of cash of
$500,000, which was paid upon execution of the agreement, and
$150,000 in an unsecured promissory noted due in mid-1997.
Construction of 19,000 square feet of additional and renovated
manufacturing and administrative space which began in August
1994 is nearing completion. Occupancy of the administrative
offices occurred in late June. Completion and occupancy of
the new expanded manufacturing facilities will be on or about
October 1. The estimated cost of this construction is
approximately $1.2 million and is being funded by a
construction loan to be converted to a long-term mortgage at
the end of the construction period. Total capital
expenditures for the year, including the above mentioned
project, are projected at approximately $2.5 million.
At June 30, 1995, the Company had cash and short-term
investments of $9,109,000 and working capital of $14,912,000.
Trade accounts receivable increased $370,000, or 7%, while
inventories decreased $101,000, or 3% compared to March 31,
1995. The increase in receivables is largely due to the
European receivables, which are in line with the significant
increase in European sales. The change in inventories
reflects improved turnover and tighter control of stock
levels.
Cash flow from operations is expected to continue to fund
working capital requirements for the foreseeable future.
Currently, the Company has available $6 million in a line of
credit with a commercial bank.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
In June 1995, Meridian and Inova diagnostics, Inc. were sued
by Delta Biologicals srl in the 11th Judicial circuit for Dade
County, Florida. The action relates to a February 1995
agreement between Meridian s European subsidiary, Meridian
Diagnostics Europe, srl, and Inova for the marketing and
distribution of a line of autoimmune disease tests
manufactured by Inova. The plaintiff alleges that the
agreement violates its distribution agreement with Inova and
seeks unspecified damages from Inova and Meridian. In the
February 1995 agreement, Inova represented to Meridian that
Inova had the right to indemnify Meridian Diagnostics Europe
from any losses it might suffer should those representations
and warranties be incorrect.
Item 5. Other Information
On December 13, 1994, the Company received FDA clearance to
begin marketing the Company s fifth internally developed
ImmunoCard(R) product, used for diagnosis of H. pylori, an
organism linked to stomach ulcers, stomach cancer and other
gastric ailments. These disorders affect 20 million people
annually in the U.S. and over 60 million worldwide.
ImmunoCard(R) H. pylori is ideal for use in the physician s
office or the alternate site market such as HMO s or nursing
homes as well as hospitals and commercial laboratories. This
rapid test provides clinicians with a diagnostic tool to aid
in the identification of patients whose ulcers, dyspepsia and
gastritis may be treated with antibiotic therapy and bismuth.
On March 14, 1995, the Company also received FDA clearance to
begin marketing Premier H. pylori. This new test will provide
testing sites a number of new user-friendly features such as
broader sample flexibility with the ability to use either
plasma or serum, a more simplified control protocol, options
for both visual or instrumentation readings and a color coded
reagent system to ensure simplicity in testing and accuracy of
results.
On April 14, 1995, the Company received FDA clearance to
market Premier EHEC, a new product used in the diagnosis of
Enterohemorrhagic E. coli. Outbreaks of illness from
ingestion of contaminated food products, primarily ground
beef, have been identified throughout the United States. This
pathogen produces toxins which cause hemorrhagic colitis,
which is characterized by bloody diarrhea and sever abdominal
cramps. The disease is most serious in the elderly and
pediatric populations. Children are at a high risk of
developing hemolytic uremic syndrome (HUS) which results in
acute renal failure and an estimated 3% to 5% mortality in
this population. Meridian s Premier EHEC EIA (Enzyme
Immunoassay) will detect the toxins from overnight culture
isolates in less than two hours using an automatable
procedure. The Premier EHEC test performed in microtiter well
format is ideal for hospitals of all sizes and yields a rapid
diagnosis methodology for patients displaying symptoms of
bloody diarrhea.On July 14, 1995, the Company submitted to the
FDA an application for permission to sell an improved Premier
EHEC. The new version of the product will detect toxins
directly in stool and thus eliminate the need and cost for
overnight culture. The reduced turnaround time for results is
critical to treating patients and detecting outbreaks early to
eliminate transmission.
On July 17, 1995, the Company announced it will market a test
used to detect Giardia lamblia, the most common parasitic
disease in the United States. The test is accurate, cost
effective, rapid and easy to perform. This new, highly
accurate assay demonstrates sensitivity and specificity
exceeding 97%. Premier Giardia requires no instrumentation or
specimen preparation procedures.
Giardia lamblia, a protozoan parasite which causes severe
diarrhea and can also be the cause of serious liver disease,
is often found in public water supplies. The Centers for
Disease Control estimate between one half million and one
million U.S. cases of Giardia infections occur annually.
Giardia is the most frequently documented cause of water borne
epidemic diarrhea in the United States and is commonly found
in many daycare centers throughout the country. The parasite
is generally acquired through the ingestion of contaminated
water or contact with contaminated fecal matter. Symptoms of
this disease include diarrhea, nausea, weight loss,
malabsorption, abdominal cramps and anemia. Recent studies
indicate that daycare centers may be directly or indirectly
responsible for 45% of the diagnosed Giardia infections in the
U.S.
On February 16, 1995, the Company announced the signing of an
agreement between its wholly-owned European subsidiary,
Meridian Diagnostics Europe, and INOVA Diagnostics Inc., San
Diego, California, for the marketing and distribution of a
complete line of autoimmune disease tests manufactured by
INOVA. These products utilize the latest technology for the
testing of autoimmune diseases such as herpes and certain
types of rheumatic diseases. The current autoimmune disease
market in Italy is approximately $18 million. The Company
began selling the INOVA line in May.
<PAGE>
On May 24, 1995, the Company was notified by the Ohio
Department of Development and the Office of the Governor that
it was one 35 companies that had received the 1995 Governor s
E-Award. The award recognizes those companies exporting Ohio
products and services to international markets. Criteria for
this award are based on increased volume of a company s
exports, increased Ohio-based employment directly attributed
to exporting, and development and implementation of strategies
to expand the Company s international sales.
The Company was also recognized by The Cleveland Plain Dealer
as one of the 100 best performing companies in the State of
Ohio for a third consecutive year.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits-
Exhibit
No. Description Page
_____ _______________________ _______
11 Computation of earnings
per common share 15
27 Financial Data Schedule 16-18
(b) Reports on Form 8-K - None
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 there-unto duly authorized.
MERIDIAN DIAGNOSTICS, INC.
Date: 7/27/95 Gerard Blain
__________________________
GERARD BLAIN, Vice
President, Chief Financial
Officer (Principal
financial officer)
<PAGE>
<PAGE>
EXHIBIT 11
Meridian Diagnostics, Inc.
and Subsidiaries
Computation of Earnings Per Common Share
Periods Ended June 30, 1995
Weighted Avg. Earnings
Number of Per
Common Shares Common
Outstanding Net Income Share
____________ __________ _______
Quarter ended
June 30, 1995:
Shares
outstanding,
April 1, 1995 8,210,410 $ - $ -
Weighted average
shares issued
during quarter
(22,721 shares) 15,500 - -
Net income - 985,281 -
_________ _________ __________
8,225,910 985,281 .12
_________ _________ __________
Effect of
outstanding stock
options which is
less than 3% and
not required to
be disclosed in
the financial
statements
(381,080 shares) 169,558 - -
_________ ___________ __________
8,395,468 985,281 .12
Effect of
convertible
debentures 1,266,337 125,928 -
__________ __________ __________
9,661,803 $1,111,209 $ .12
__________ __________ __________
__________ __________ __________
Six months ended
June 30, 1995:
Shares
outstanding
October 1, 1994 8,195,290 $ - $ -
Weighted average
shares issued
during the period
(42,300 shares) 15,640 - -
Weighted average
shares redeemed
for cash as a
result of stock
dividend (265
shares) (199) - -
Treasury shares
repurchased
(4,194 shares) (2,273) - -
Net income - 2,360,617 -
________ __________ __________
8,208,458 2,360,617 .29
Effect of
outstanding stock
options which is
less than 3% and
not required to
be disclosed in
the financial
statements
(381,080 shares) 169,558 - -
_________ __________ __________
8,378,016 2,360,617 $ .28
Effect of
convertible
debentures 1,266,337 380,216 -
_________ _________ __________
9,644,353 $2,740,833 $ .28
__________ __________ __________
__________ __________ __________
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> JUN-30-1995
<CASH> 1,879,606
<SECURITIES> 7,229,516
<RECEIVABLES> 6,208,454
<ALLOWANCES> 233,180
<INVENTORY> 3,008,669
<CURRENT-ASSETS> 18,933,771
<PP&E> 11,053,172
<DEPRECIATION> 4,552,290
<TOTAL-ASSETS> 34,469,180
<CURRENT-LIABILITIES> 4,022,013
<BONDS> 15,649,104
<COMMON> 1,204,929
0
0
<OTHER-SE> 13,593,134
<TOTAL-LIABILITY-AND-EQUITY> 34,469,180
<SALES> 18,356,729
<TOTAL-REVENUES> 18,356,729
<CGS> 6,079,338
<TOTAL-COSTS> 6,079,338
<OTHER-EXPENSES> 7,757,244
<LOSS-PROVISION> 233,180
<INTEREST-EXPENSE> 857,268
<INCOME-PRETAX> 4,036,640
<INCOME-TAX> 1,676,023
<INCOME-CONTINUING> 2,360,617
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,360,617
<EPS-PRIMARY> .29
<EPS-DILUTED> .29
</TABLE>
