Neogen reports 27% increase in quarterly net income

LANSING, Mich., March 26, 2013 /PRNewswire/ -- Neogen Corporation (Nasdaq: NEOG) announced today that its net income for the third quarter of FY 2013, which ended Feb. 28, increased 27% to $6,652,000, or $0.27 per share, compared to the prior year's third quarter net income of $5,244,000, or $0.22 a share. Year to date, nine-month net income increased 22% to $20,158,000, or $0.83 per share, compared to $16,485,000, or $0.69 per share, in the prior year.

Third quarter revenues were $51,055,000, an increase of 14% from the previous year's third quarter revenues of $44,912,000. Year to date, nine-month revenues increased 12% in the current fiscal year to $151,522,000 from FY 2012's $135,501,000.

"We are pleased to report another record-breaking quarter for revenues and even bigger income growth," said James Herbert, Neogen's chief executive officer and chairman. "The growth and improved earnings are the result of increased market share, new products, and revenues from recent acquisitions. The quarter also saw the opening of several new market opportunities that should help fuel future growth."

Neogen's gross margin increased to 53.5% of sales in its third quarter, compared to 51.0% of sales for FY 2012's third quarter. For the year to date, gross margins were also 53.5%, reflective of a shift in product mix toward higher margin products, including food safety diagnostics, rodenticides, new products acquired in the Macleod acquisition, and manufacturing efficiencies. Operating expenses increased during the quarter, primarily as a result of investments made in the company's sales and marketing infrastructure, and personnel and related expenses absorbed through acquisition.

"Cost reductions in raw material and productivity improvements, in addition to the favorable product mix, have pushed up gross margins," said Lon Bohannon, Neogen's president and chief operating officer. "We are also pleased to report third quarter sales that were not only substantially above last year, but also higher than our traditionally strong second quarter. Growth in revenues from new products launched in the last 18 months along with solid growth in many of our existing market segments contributed to the strong third quarter sales performance."

The third quarter was the 84th quarter of the past 89 quarters that Neogen reported revenue increases as compared with the previous year — including all consecutive quarters in the last eight years.

"As our balance sheet shows, we have been able to continue to grow our available cash balance even with three cash acquisitions within the past 12 months," said Steve Quinlan, Neogen's chief financial officer. "This positions us well to pursue all available avenues of growth, including further synergistic acquisitions."

Sales of Neogen's extensive line of food allergen tests increased in the third quarter of FY 2013 when compared to the prior year's third quarter, as food processors continued implementing programs to comply with components of the United States' Food Safety Modernization Act (FSMA) of 2011. The allergen testing by food processors helps prevent the contamination of non-allergenic products with known food allergens.

Sales of Neogen's test kits for meat speciation, and complementary Scotland-based laboratory services, more than tripled on a quarter-to-quarter comparison as the company responded to the horse meat scandal in Europe, where product represented as ground beef was found to contain horse and pig meat. This response helped the company's Neogen Europe subsidiary achieve an 18% increase in revenues for the third quarter when compared to the prior year quarter.

The third quarter also saw a significant increase in the sales of Neogen's line of dairy antibiotic tests. This increase, when compared to FY 2012's third quarter, was due to timing of international shipments to a distributor as well as increases in sales of the product line in Brazil. The increase was also due to continued market acceptance of Neogen's BetaStar® Combo product, which simply and accurately detects both beta-lactam and tetracycline antibiotics. Sales of tests to detect histamine also increased significantly in the third quarter when compared to the same quarter in FY 2012. Histamine is a toxin produced post harvest in certain types of fish, especially tuna, if they are improperly handled.

Revenues from the company's genomics testing service business increased approximately 20% in the third quarter, compared to the prior year quarter. This increase was due to the increased sample volumes from the existing customer bases, including the beef cattle business. The improvement was also due to increased sales efforts for these services in both Brazil and Europe. 

Sales of Neogen's rodenticides continued their strong rebound in FY 2013, increasing significantly from the prior year's comparable third quarter, as sales returned to their historical norms after regulatory changes caused a decline in Neogen's rodenticide sales in its 2012 fiscal year.

Sales of Uniprim®, a leading veterinary antibiotic, continued to be strong since its acquisition from Macleod Pharmaceuticals in October 2012. Uniprim is a prescription-only combination of trimethoprim and sulfadiazine that provides effective antibacterial activity against a wide range of infections in animals. The current quarter also included a significant increase, when compared to the third quarter of FY 2012, in sales of its veterinary detectable D3 Needles™. Neogen's D3 Needles are exceptionally strong to lessen the chance they may break off when treating an animal, and also easily detectable in standard meat processing metal detectors in the unlikely event they ever break.

Neogen Corporation develops and markets products dedicated to food and animal safety. The company's Food Safety Division markets dehydrated culture media and diagnostic test kits to detect foodborne bacteria, natural toxins, food allergens, drug residues, plant diseases and sanitation concerns. Neogen's Animal Safety Division is a leader in the development of animal genomics along with the manufacturing and distribution of a variety of animal healthcare products, including diagnostics, pharmaceuticals, veterinary instruments, wound care and disinfectants.

NEOGEN CORPORATION UNAUDITED SUMMARIZED CONSOLIDATED OPERATING DATA

(In thousands, except for per share and percentages)








Quarter ended
Feb. 28/29


Nine months ended
Feb. 28/29



2013

2012


2013

2012








Revenue







Food Safety

$25,312

$21,923


$77,537

$67,247


Animal Safety

25,743

22,989


73,985

68,254

Total revenue

51,055

44,912


151,522

135,501

Cost of sales

23,742

22,020


70,409

66,975

Gross margin

27,313

22,892


81,113

68,526

Other expenses







Sales & marketing

10,533

8,929


30,232

25,662


Administrative

5,132

4,660


14,510

12,846


Research & development

1,982

1,754


5,901

4,976

Total other expenses

17,647

15,343


50,643

43,484

Operating income

9,666

7,549


30,470

25,042

Other income (expense)

394

595


544

543

Income before tax

10,060

8,144


31,014

25,585

Income tax

3,450

2,900


10,950

9,100

Net income

$6,610

$5,220


$20,064

$16,448

Net loss (income) attributable







to non-controlling interest

42

24


94

37

Net income attributable to Neogen Corp

$6,652

$5,244


$20,158

$16,485

Net income attributable to Neogen Corp







per diluted share

$0.27

$0.22


$0.83

$0.69















Other information:







Shares to calculate per share

24,402

23,988


24,303

23,999


Depreciation & amortization

$1,812

$1,578


$5,103

$4,489


Interest income

33

30


114

78


Gross margin (% of sales)

53.5%

51.0%


53.5%

50.6%


Operating income (% of sales)

18.9%

16.8%


20.1%

18.5%


Revenue increase vs. FY 2012

13.7%



11.8%



Net income increase (decrease)







vs. FY 2012

26.6%



22.0%


 

NEOGEN CORPORATION SUMMARIZED CONSOLIDATED BALANCE SHEET DATA

(In thousands)







Feb. 28

May 31



2013

2012



(Unaudited)

(Audited)





Assets



Current assets




Cash & investments

$74,566

$68,645


Accounts receivable

38,694

35,652


Inventory

41,082

34,992


Other current assets

5,729

4,652

Total current assets

160,071

143,941

Property & equipment

33,414

29,933

Goodwill & other assets

87,540

77,726

Total assets

$281,025

$251,600





Liabilities & Equity



Current liabilities

$22,569

$19,979

Long-term debt

-

-

Other non-current liabilities

12,758

12,567

Equity: Shares outstanding




23,922 in Feb. & 23,620 in May

245,698

219,054

Total liabilities & equity

$281,025

$251,600

Certain portions of this news release that do not relate to historical financial information constitute forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties. Actual future results and trends may differ materially from historical results or those expected depending on a variety of factors listed in Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's most recently filed Form 10-K.

CONTACT:
Steven J. Quinlan
Vice President and CFO
517/372-9200

SOURCE Neogen Corporation



RELATED LINKS
http://www.neogen.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.