LANSING, Mich., March 21, 2017 /PRNewswire/ -- Neogen
Corporation (NASDAQ: NEOG) announced today that its net income for
the third quarter of fiscal 2017, which ended Feb. 28, increased 24% to $10,287,000, when compared to the prior year's
$8,311,000. Earnings per share in the
current quarter were $0.27, compared
to $0.22 a year ago. Current
year-to-date net income increased 17% over prior year to
$31,320,000, or $0.82 per share, compared to $26,707,000, or $0.71 per share, for the same period a year
ago.
Revenues for the third quarter of fiscal 2017 increased 15% to
$88,385,000, from the previous year's
third quarter revenues of $76,725,000. The quarterly revenue and net income
results represent third quarter records for the 34-year-old
company. Year to date fiscal 2017 revenues increased 14% to
$262,747,000 from fiscal 2016's
$231,196,000.
"We are pleased to report another record third quarter for our
34-year-old company," said James
Herbert, Neogen's chief executive officer and chairman.
"This is especially noteworthy since international currency
translations reduced both revenues and net income. However, we
continue to grow in our mission-critical countries, regardless of
the current currency environment, as they will be even more
important to Neogen's strategic plan in the years ahead."
The third quarter was the 100th of the past 105 quarters that
Neogen reported revenue increases as compared with the previous
year — including all consecutive quarters in the last 11 years.
"Our third quarter was yet another example of Neogen being there
to meet the increased product needs of our customers," said
Richard Calk, Neogen's president and
chief operating officer. "In the quarter we continued to see
increased sales of our diagnostic test kits as we responded to an
outbreak of the mycotoxin DON in corn and wheat crops, and
increased demand of allergen test kits due to continued food
recalls regarding the detection of unlabeled food allergens. On the
Animal Safety side, we've expanded our cleaner and disinfectant
product offerings, and recorded a strong increase in sales of
recently developed genomic products for the dairy industry."
Gross margins were 46.3% in the third quarter, compared to 45.9%
for fiscal 2016's third quarter. Factors contributing to the change
in gross margin included a favorable shift in product mix,
partially offset by adverse currency translations. Operating income
was $14.4 million, or 16.2% of sales,
in the current quarter, compared to $11.3
million, or 14.7%, in the third quarter of the company's
2016 fiscal year.
"We continue to solidify our balance sheet through our strong
operating performance," said Steve
Quinlan, Neogen's chief financial officer. "We are using
cash generated internally to pursue our varied growth strategies,
which include acquisitions and in-house development of new products
and services."
Overall organic growth for the company was 5% for the
quarter.
In the current year third quarter, revenues for the company's
Food Safety segment increased 24% compared to the prior year, due
to strength in a number of existing product lines, and to a lesser
extent, recent acquisitions. Overall organic growth for the Food
Safety segment was 12% for the quarter. The current third quarter
Food Safety sales performance was led by a 29% increase in sales of
Neogen's rapid tests for natural toxins. Increased testing for the
toxins continues to be driven by the 2016 bumper crop of corn in
the U.S., Canada and Europe, which necessitated the storage of
harvested corn in temporary, non-enclosed conditions conducive to
the creation of the molds that create the toxins.
Sales of Neogen's test kits to detect food allergens, such as
gluten, milk and peanuts, increased 14% in the current third
quarter. This increase was aided by increasing global food allergen
regulatory efforts, and strong sales of Neogen's product to
simultaneously detect six tree nuts with one test. Sales of the
company's automated spoilage microorganism (e.g., yeast and mold)
equipment and vials increased 12% in the current quarter compared
to the prior year. These systems use disposable proprietary vials
to detect microorganisms of particular importance to the food and
nutraceutical industries in a fraction of time of traditional
microbiological methods.
Revenues for the company's Animal Safety segment increased 8%
during the third quarter compared to the prior year, aided by the
May 2016 Preserve acquisition. The
company's sales of rapid tests to detect drug residues in forensic
samples rose 39% compared to the prior year quarter, due to a
significant increase in sales of drug detection kits to commercial
labs. Sales of small animal supplements decreased substantially in
the current quarter, due to the market withdrawal of a canine
product. Sales of Neogen's rodenticides also decreased in the
quarter, as a rodent outbreak in the Northwest U.S. in the prior
year has subsided.
Revenues from Neogen's worldwide animal genomics business
increased 20% in the third quarter of fiscal 2017 compared to the
prior year. This growth was primarily the result of increased
testing capability gained through expansion of the company's
testing facilities in Scotland,
development of popular new genomic testing products, and the
acquisition of Brazil-based Deoxi
in April 2016. The new products
include genomic tests that offer commercial dairy producers
essential information on the genetic potential of replacement dairy
heifers.
Revenues from Neogen's Scotland-based subsidiary increased 31% in
British pounds for the third quarter of the 2017 fiscal year; the
increase was reduced to 12% when translated to dollars. This growth
was due to a substantial comparative increase in genomics revenues,
and higher sales of mycotoxin test kits. Revenues from Neogen do
Brasil increased 81% in the current quarter, primarily due to
significant sales increases of forensic and diagnostic test kits
and the real's recovery against the dollar. Neogen's subsidiary in
China recorded a 68%
quarter-over-quarter sales increase, and sales from the company's
operations in India and
Canada increased significantly
compared to the prior year quarter — albeit from small bases.
Revenues from Neogen's Mexican subsidiary declined 2% in U.S.
dollars for the quarter compared to the prior year as the peso
continued to devalue against the dollar. However, revenues rose 15%
in pesos.
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.
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.
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
|
|
2017
|
2016
|
|
2017
|
2016
|
Revenue
|
|
|
|
|
|
Food Safety
|
$
42,949
|
$
34,710
|
|
$
123,067
|
$
106,706
|
Animal
Safety
|
45,436
|
42,015
|
|
139,680
|
124,490
|
Total
revenue
|
88,385
|
76,725
|
|
262,747
|
231,196
|
Cost of
sales
|
47,505
|
41,529
|
|
137,797
|
119,985
|
Gross
margin
|
40,880
|
35,196
|
|
124,950
|
111,211
|
Operating
expenses
|
|
|
|
|
|
Sales &
marketing
|
15,340
|
13,953
|
|
45,824
|
41,727
|
Administrative
|
8,548
|
7,538
|
|
25,094
|
21,081
|
Research &
development
|
2,641
|
2,451
|
|
8,087
|
7,642
|
Total operating
expenses
|
26,529
|
23,942
|
|
79,005
|
70,450
|
Operating
income
|
14,351
|
11,254
|
|
45,945
|
40,761
|
Other income
(expense)
|
1,376
|
385
|
|
1,788
|
(492)
|
Income before
tax
|
15,727
|
11,639
|
|
47,733
|
40,269
|
Income tax
|
5,350
|
3,350
|
|
16,250
|
13,550
|
Net income
|
$
10,377
|
$
8,289
|
|
$
31,483
|
$
26,719
|
Net loss (income)
attributable
to non-controlling interest
|
$
(90)
|
$
22
|
|
$
(163)
|
$
(12)
|
Net income
attributable to Neogen Corp
|
$
10,287
|
$
8,311
|
|
$
31,320
|
$
26,707
|
Net income
attributable to Neogen Corp
|
|
|
|
|
|
per diluted
share
|
$
0.27
|
$
0.22
|
|
$
0.82
|
$
0.71
|
|
|
|
|
|
|
Other
information:
|
|
|
|
|
|
Shares to calculate
per share
|
38,534
|
37,958
|
|
38,371
|
37,858
|
Depreciation &
amortization
|
$
3,653
|
$
3,149
|
|
$
10,691
|
$
8,829
|
Interest
income
|
271
|
120
|
|
690
|
238
|
Gross margin (% of
sales)
|
46.3%
|
45.9%
|
|
47.6%
|
48.1%
|
Operating income (% of
sales)
|
16.2%
|
14.7%
|
|
17.5%
|
17.6%
|
Revenue increase vs.
FY 2016
|
15.2%
|
|
|
13.6%
|
|
Net income vs. FY
2016
|
23.8%
|
|
|
17.3%
|
|
NEOGEN CORPORATION
SUMMARIZED CONSOLIDATED
|
BALANCE SHEET
DATA
|
(In
thousands)
|
|
|
Feb.
28
|
May
31
|
|
2017
|
2016
|
|
(Unaudited)
|
(Audited)
|
Assets
|
|
|
Current
assets
|
|
|
Cash &
investments
|
$
124,582
|
$
107,796
|
Accounts
receivable
|
67,367
|
67,652
|
Inventory
|
75,396
|
64,371
|
Other current
assets
|
9,425
|
10,182
|
Total current
assets
|
276,770
|
250,001
|
Property &
equipment, net
|
60,975
|
54,683
|
Goodwill & other
assets
|
169,553
|
147,031
|
Total
assets
|
$
507,298
|
$
451,715
|
Liabilities &
Equity
|
|
|
Current
liabilities
|
$
34,723
|
$
28,598
|
Other long-term
liabilities
|
20,919
|
18,956
|
Equity: Shares
outstanding
38,119 in Feb. & 37,568 in May
|
451,656
|
404,161
|
Total liabilities
& equity
|
$
507,298
|
$
451,715
|
CONTACT:
|
Steven J. Quinlan,
Vice President and CFO
|
|
517/372-9200
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/neogen-reports-24-increase-in-net-income-300426896.html
SOURCE Neogen Corporation