Meridian Bioscience Reports Record Operating Results, Declares Regular Cash Dividend, Reaffirms Higher Fiscal 2006 Guidance, and Comments on Fiscal 2007 Outlook

-- reported record third quarter and nine-month sales of $26,583,000 and $79,763,000, respectively, an increase of 5% and 17% over the same periods of the prior fiscal year;

-- reported record third quarter and nine-month operating income of $6,893,000 and $20,040,000, respectively, an increase of 21% and 39% over the same periods of the prior fiscal year;

-- reported record third quarter and nine-month diluted earnings per share of $0.18 and $0.51, respectively, an increase of 29% and 38% over the same periods of the prior fiscal year;

-- declared the regular quarterly cash dividend of $0.115 per share (indicated annual rate of $0.46 per share), 44% higher than the regular quarterly rate of fiscal 2005; and

-- reaffirmed its recently increased guidance of net sales between $106 million and $109 million (previously $103 to $107 million) and per share-diluted earnings between $0.63 and $0.66 (previously $0.60 to $0.63) for the fiscal year ending September 30, 2006.

-- expects continuing double-digit sales and earning growth for fiscal 2007, initial guidance to be provided by mid-August
FINANCIAL HIGHLIGHTS
In Thousands, Except per Share Data
------------------------------------

Three Months Nine Months
June 30, June 30,
2006 2005 Change 2006 2005 Change
---------------------------------------------
Net sales $26,583 $25,421 +5% $79,763 $67,949 +17%
Operating income 6,893 5,708 +21% 20,040 14,373 +39%
Net earnings 4,862 3,498 +39% 13,547 8,804 +54%
Earnings per share
(diluted) $0.18 $0.14 +29% $0.51 $0.37 +38%

Cash and investments $35,728 $4,028
Working capital 58,391 18,477
Long-term debt
obligations 1,823 5,386
Shareholders' equity 92,140 48,965
Total assets 114,836 80,666

THIRD QUARTER RESULTS

Net sales for the third fiscal quarter ended June 30, 2006, were$26,583,000 as compared to $25,421,000 for the same period of theprior fiscal year, an increase of 5%. Net earnings for the thirdquarter of fiscal 2006 were $4,862,000, or $0.18 per diluted share, up39% and 29%, respectively, over the third quarter of fiscal 2005.Diluted common shares outstanding for the third quarter of fiscal 2006and 2005 were 26,788,000 and 24,302,000 respectively, an increase of10% due primarily to the issuance of 1,800,000 shares in September2005 and conversions of 5% convertible debentures.

YEAR-TO-DATE RESULTS

Net sales for the nine months ended June 30, 2006, were$79,763,000 as compared to $67,949,000 for the same period of theprior fiscal year, an increase of 17%. Net earnings for the ninemonths ended June 30, 2006, were $13,547,000, or $0.51 per dilutedshare, up 54% and 38%, respectively, over the same period of priorfiscal year 2005. Diluted common shares outstanding for the first ninemonths of fiscal 2006 and 2005 were 26,768,000 and 23,892,000respectively, an increase of 12%.

CASH DIVIDEND MATTERS

The Board of Directors declared the regular quarterly cashdividend of $0.115 per share for the third quarter ended June 30,2006. The record date is July 31, 2006 and the dividend is payableAugust 7, 2006. The annual indicated cash dividend rate for fiscal2006 is $0.46 per share, an increase of 44% over the fiscal 2005 rateof $0.32 per share. Meridian has increased its regular cash dividendrate fourteen times since it established a regular dividend sixteenyears ago. Guided by the Company's policy of setting a payout ratio ofbetween 75% and 85% of each fiscal year's expected net earnings, theactual declaration and amount of dividends will be determined by theBoard of Directors in its discretion based upon its evaluation ofearnings, cash flow requirements and future business developments,including acquisitions.

FISCAL 2006 HIGHER GUIDANCE REAFFIRMED

On April 20, 2006, Meridian announced that it increased itsprevious guidance for fiscal 2006 earnings from a range of $0.60 to$0.63 per diluted share to a new range of $0.63 to $0.66 per dilutedshare. The per share estimates assume an increase in average sharesoutstanding from approximately 24.1 million at fiscal 2005 year end to26.8 million at fiscal 2006 year end. Net sales guidance for fiscal2006 was increased from $103 million to $107 million to a new range of$106 million to $109 million. This earnings and sales guidance doesnot include the effect of any acquisitions the Company might completeduring fiscal 2006.

FINANCIAL CONDITION

The Company's financial condition is sound. At June 30, 2006,current assets were $75,027,000 compared to current liabilities of$16,636,000 thereby producing working capital of $58,391,000 and acurrent ratio of 4.5. Cash and investments on hand were $35,728,000,including proceeds from the September 2005 common stock offering, andthe Company had 100% borrowing capacity under its $22,500,000commercial bank credit facility. Long-term debt obligations were$1,823,000 compared to shareholders' equity of $92,140,000.
UNAUDITED OPERATING RESULTS
In Thousands, Except per Share Data
------------------------------------

The following table sets forth the unaudited comparative operating
results of Meridian Bioscience for the interim periods of fiscal 2006
and fiscal 2005.

Three Months Nine Months
June 30, June 30,
2006 2005 2006 2005
----------------------------------------------------------------------
Net sales $26,583 $25,421 $79,763 $67,949
Cost of goods sold 10,228 9,735 31,678 27,673
-------------------------------------
Gross profit 16,355 15,686 48,085 40,276
-------------------------------------

Operating expenses
Research and development 1,278 1,190 3,633 2,884
Sales and marketing 3,955 3,647 12,226 11,019
General and administrative 4,229 5,141 12,186 12,000
-------------------------------------
Total operating expenses 9,462 9,978 28,045 25,903
-------------------------------------

Operating income 6,893 5,708 20,040 14,373
Other income (expense), net 416 (193) 807 (545)
-------------------------------------
Income before income taxes 7,309 5,515 20,847 13,828
Income tax provision 2,447 2,017 7,300 5,024
-------------------------------------
Net earnings $4,862 $3,498 $13,547 $8,804
=====================================

Net earnings per basic common
share $0.19 $0.15 $0.52 $0.38
Basic common shares outstanding 26,097 23,652 26,070 23,217

Net earnings per diluted common
share $0.18 $0.14 $0.51 $0.37
Diluted common shares outstanding 26,788 24,302 26,768 23,892
SEGMENT DATA
In Thousands
--------------

The following table sets forth the unaudited operating segment
data for the interim periods in fiscal 2006 and fiscal 2005.

Three Months Nine Months
June 30, June 30,
2006 2005 2006 2005
--------------------------------------------
Net sales (third-party)
U.S. Diagnostics $15,533 $13,646 $48,539 $40,035
European Diagnostics 5,287 4,880 14,841 13,805
Life Science 5,763 6,895 16,383 14,109
--------------------- ----------------------
$26,583 $25,421 $79,763 $67,949
===================== ======================
Operating Income
U.S. Diagnostics $5,240 $3,296 $15,058 $9,949
European Diagnostics 1,021 835 2,560 1,985
Life Science 686 1,744 2,491 2,548
Eliminations (54) (167) (69) (109)
--------------------- ----------------------
$6,893 $5,708 $20,040 $14,373
===================== ======================

COMPANY COMMENTS

John A. Kraeutler, President and Chief Operating Officer,commented, "Our diagnostics businesses continue to generate solidgrowth in sales, operating income and cash flow, leading to impressivegains in operating margins. Led by our innovative tests for stomachulcers, C. difficile disease and upper respiratory infections, wecontinue to capture market share in the primary strategic segments ofMeridian's global diagnostics business. Our Life Science business,which is up 16% year-to-date, was affected by shifts in buyingpatterns from several of our larger federal and commercial customersduring the quarter. We have recently added manufacturing capacity atseveral of our Life Science locations to support our growth plans.

"During the quarter, we received CLIA (federal regulatory) waiverstatus for our ImmunoCard STAT!(R) HpSA stomach ulcer test, allowingthis rapid test to be used in physicians' offices. In addition, ourdedicated focus on gaining support for H. pylori testing in themanaged care network is yielding good early signs of success withphysicians and payors."

William J. Motto, Chairman and Chief Executive Officer, commented,"Once again, the profitability of the business during the thirdquarter demonstrated favorable operating leverage. As sales continuedto increase for the third quarter, our gross profit and operatingincome margins were 61.5% and 25.9%, respectively. We recentlyincreased our guidance for fiscal 2006 and continue to be comfortablewith the outlook for the fourth quarter and full year. We will provideour initial guidance for fiscal 2007 by mid-August. Preliminaryindications are for the continuation of double-digit sales andearnings growth. Our balance sheet is sound and the Company isconservatively capitalized with shareholders' equity of $92.1 millionand long-term debt of only $1.8 million. At June 30, 2006, cash andinvestments totaled $35.7 million. Clearly, we are in an excellentposition to pursue additional acquisitions. We are constantlyexploring ways to build the business through external growth. Cashflow remains strong and we will review the appropriateness of anotherincrease in our regular cash dividend rate after fiscal 2006 year-end.Our vision of building shareholder value through higher sales,earnings, cash flow, and dividends coupled with a sound financialcondition continues."

FORWARD LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides asafe harbor from civil litigation for forward-looking statementsaccompanied by meaningful cautionary statements. Except for historicalinformation, this report contains forward-looking statements which maybe identified by words such as "estimates", "anticipates", "projects","plans", "seeks", "may", "will", "expects", "intends", "believes","should" and similar expressions or the negative versions thereof andwhich also may be identified by their context. Such statements arebased upon current expectations of the Company and speak only as ofthe date made. The Company assumes no obligation to publicly updateany forward-looking statements. These statements are subject tovarious risks, uncertainties and other factors that could cause actualresults to differ, including, without limitation, the following:Meridian's continued growth depends, in part, on its ability tointroduce into the marketplace enhancements of existing products ornew products that incorporate technological advances, meet customerrequirements and respond to products developed by Meridian'scompetition. While Meridian has introduced a number of internallydeveloped products, there can be no assurance that it will besuccessful in the future in introducing such products on a timelybasis. Ongoing consolidations of reference laboratories and formationof multi-hospital alliances may cause adverse changes to pricing anddistribution. Costs and difficulties in complying with laws andregulations administered by the United States Food and DrugAdministration can result in unanticipated expenses and delays andinterruptions to the sale of new and existing products. Changes in therelative strength or weakness of the U.S. Dollar can change expectedresults. One of Meridian's main growth strategies is the acquisitionof companies and product lines. There can be no assurance thatadditional acquisitions will be consummated or that, if consummated,will be successful and the acquired businesses successfully integratedinto Meridian's operations.

Meridian is a fully integrated life science company thatmanufactures, markets and distributes a broad range of innovativediagnostic test kits, purified reagents and related products andoffers biopharmaceutical enabling technologies. Utilizing a variety ofmethods, these diagnostic products and tests provide accuracy,simplicity and speed in the early diagnosis and treatment of commonmedical conditions, such as gastrointestinal, viral, urinary andrespiratory infections. Meridian diagnostic products are used outsideof the human body and require little or no special equipment. TheCompany's products are designed to enhance patient well-being whilereducing the total outcome costs of healthcare. Meridian has strongmarket positions in the areas of gastrointestinal and upperrespiratory infections, serology, parasitology and fungal diseasediagnosis. In addition, Meridian is a supplier of rare reagents,specialty biologicals and related technologies used bybiopharmaceutical companies engaged in research for new drugs andvaccines. The Company markets its products and technologies tohospitals, reference laboratories, research centers, veterinarytesting centers, physician offices, diagnostics manufacturers andbiotech companies in more than 60 countries around the world. TheCompany's shares are traded through Nasdaq's National Market, symbolVIVO. Meridian's website address is www.meridianbioscience.com.