LANSING, Mich., July 19, 2016 /PRNewswire/ -- Neogen Corporation
(NASDAQ: NEOG) announced today that revenues for the fourth quarter
of its 2016 fiscal year, which ended May
31, were $90,079,000, an
increase of 15% compared to the prior year quarter. Revenues for
fiscal 2016 increased 13% to $321,275,000 from the prior year's $283,074,000. This increase was aided by recent
acquisitions completed by the company, and was achieved despite
adverse top line currency adjustments of approximately $7.7 million for the full year resulting from
currency weakness in Neogen's international markets.
Neogen's fourth quarter net income was $9,857,000, or $0.26 per fully diluted share, compared to
$9,384,000, or $0.25 per share, in fiscal 2015. Net income for
the 2016 fiscal year increased 9% to $36,564,000, or $0.97 per share, compared to the prior year's
$33,526,000, or $0.90 per share. Revenues and net income for the
fourth quarter, and the 2016 fiscal year, established new all-time
highs for the 34-year-old company.
"Despite facing the challenges all American companies with
significant international revenue sources have recently faced, we
are pleased to report that a solid 2016 fiscal year performance
keeps us on our strategic plan," said James
Herbert, Neogen's chief executive officer and chairman. "We
met our goal of producing double-digit organic growth for the
fiscal year, expanded the company's product line and broadened our
geographic foundation. Although the relative strength of the U.S.
dollar created challenges to our short-term financial performance,
it also created acquisition opportunities."
The fourth quarter was the 97th of the past 102 quarters that
Neogen reported revenue increases as compared with the previous
year — including all consecutive quarters in the last 11 years.
"Neogen is well positioned as the U.S. FDA implements additional
elements of the Food Safety Modernization Act, and other regulators
worldwide adopt risk-based approaches to prevent foodborne problems
— rather than reacting after something goes wrong," said
Richard Calk, Jr., Neogen's
president and chief operating officer. "Our comprehensive suite of
food safety products and services, and expertise gained through our
34 years of working with the food industry, have positioned us to
help food companies comply with these expanding global
regulations."
Neogen's gross margin was 47.6% in its 2016 fiscal year,
compared to 49.3% for fiscal 2015. Factors contributing to the
decline in gross margin included a shift in mix toward product
lines with lower gross margins than the company average, adverse
currency translations, incremental revenue from acquisitions that
currently have gross margins lower than the company's historical
average, and standard cost adjustments at our Mexican operation.
Operating expense growth of 12%, less than the 13% revenue growth,
somewhat moderated the decline in gross margin percentage.
"We were again adversely affected by currency fluctuations in
the fiscal year, impacting both our top and bottom lines, as the
strength of the U.S. dollar resulted in comparatively lower values
for the euro, the British pound, the Brazilian real, and the
Mexican peso. For the entire year, the adverse currency effect
resulted in us reporting approximately $0.08 per share of earnings less than we would
have reported in a neutral currency environment," said Steve Quinlan, Neogen's chief financial officer.
"For some perspective on this, in local currencies our Brazilian
subsidiary recorded a 49% increase in sales for the year, which was
reduced to 7% following conversion to dollars, and our Mexican
subsidiary's local currency increase of 44% was reduced to 20% when
converted to dollars."
Neogen's Animal Safety segment achieved a revenue increase of
16% in the 2016 fiscal year when compared to 2015. The segment's
organic growth was 14% compared to the prior year, and was aided by
a new distribution agreement with a large equipment manufacturer in
the commercial dairy industry. Sales of the company's rodent
control products increased more than 50% in the current year
compared to the prior year, as Neogen increased its contract
manufacturing of rodenticides, and the company's own products
continued to make gains in the important retail agricultural
rodenticide market.
The Animal Safety segment also recorded a 15% increase in sales
of its animal care products in fiscal 2016 compared to the prior
year; these products include its biologics, wound care, and equine
and small animal supplements. The company's line of biologics
includes BotVax® B, the only available vaccine against
equine botulism.
Revenues from Neogen's animal genomics business increased 22% in
fiscal 2016 compared to the prior year, led by additional business
with a large poultry producer, increased market share with its
proprietary DNA chip technology (primarily to cattle and pig
producers), and increased canine testing.
Revenues from Neogen's Scotland-based subsidiary increased 3% for the
2016 fiscal year in local currencies, but decreased 3% after
converting to U.S. dollars. Following adverse currency translations
mentioned earlier, Mexico-based
Neogen Latinoamerica's sales increased 20%, while Neogen do
Brasil's revenues increased 7%.
Neogen recorded an 86% increase in sales into China, albeit from a small base.
Revenues for the company's Food Safety segment increased 11%
during the current fiscal year compared to the prior year. The Food
Safety segment's revenue performance for fiscal 2016 was
disproportionally affected by the negative currency translations,
as Neogen's operations in Scotland, Mexico and Brazil all report through that segment.
Organic growth for the Food Safety segment was 6% for the year;
excluding the adverse currency effect, the increase was 12%.
The company's sales of its AccuPoint® Advanced
Sanitation Monitoring System products increased 18% in fiscal 2016,
as the company's next generation system continued to gain market
acceptance, and food companies responded to increasing requirements
to test food production environments for the presence of possible
contaminants. Sales of Neogen's disposable test vials for use with
BioLumix® and Soleris® test systems increased
30% in fiscal 2016 compared to the prior year. Both systems allow
for the accurate detection of spoilage organisms in much less time
than traditional microbiology methods.
Sales of Neogen's rapid tests for food allergens, such as gluten
and peanuts, continued their strong performance in the fiscal year,
growing approximately 20% compared to the prior year. The growth
was aided by increasing global regulatory efforts, consumer demand
to ensure that products represented as being free of food allergens
are correctly labeled, and by strong initial sales of Neogen's new
product to simultaneously detect six tree nuts with one test. Sales
of Neogen's Acumedia® dehydrated culture media into
traditional domestic culture media markets, including animal
vaccine and cell culture market segments, increased 16% in the
current year when compared to fiscal 2015.
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 May 31
|
|
Year ended
May 31
|
|
2016
|
2015
|
|
2016
|
2015
|
Revenue
|
Food Safety
|
$
39,529
|
$
35,595
|
|
$
145,841
|
$
131,479
|
Animal
Safety
|
50,550
|
43,016
|
|
175,434
|
151,595
|
Total
revenue
|
90,079
|
78,611
|
|
321,275
|
283,074
|
Cost of
sales
|
48,227
|
40,913
|
|
168,211
|
143,389
|
Gross
margin
|
41,852
|
37,698
|
|
153,064
|
139,685
|
Operating
expenses
|
Sales &
marketing
|
15,872
|
14,140
|
|
57,599
|
51,757
|
Administrative
|
8,107
|
6,604
|
|
29,189
|
25,233
|
Research &
development
|
2,248
|
2,332
|
|
9,890
|
9,577
|
Total operating
expenses
|
26,227
|
23,076
|
|
96,678
|
86,567
|
Operating
income
|
15,625
|
14,622
|
|
56,386
|
53,118
|
Other income
(expense)
|
(382)
|
(314)
|
|
(873)
|
(1,042)
|
Income before
tax
|
15,243
|
14,308
|
|
55,513
|
52,076
|
Income tax
|
5,425
|
4,875
|
|
18,975
|
18,500
|
Net income
|
$
9,818
|
$
9,433
|
|
$
36,538
|
$
33,576
|
Net loss (income)
attributable
to non-controlling interest
|
$
39
|
$
(49)
|
|
$
26
|
$
(50)
|
Net income
attributable to Neogen Corp
|
$
9,857
|
$
9,384
|
|
$
36,564
|
$
33,526
|
Net income
attributable to Neogen Corp
|
|
|
|
|
|
per diluted
share
|
$
0.26
|
$
0.25
|
|
$
0.97
|
$
0.90
|
|
Other
information:
|
Shares to calculate
per share
|
37,933
|
37,648
|
|
37,875
|
37,444
|
Depreciation &
amortization
|
$
3,711
|
$
2,797
|
|
$
12,540
|
$
10,649
|
Interest
income
|
84
|
70
|
|
322
|
228
|
Gross margin (% of
sales)
|
46.5%
|
48.0%
|
|
47.6%
|
49.3%
|
Operating income (% of
sales)
|
17.3%
|
18.6%
|
|
17.6%
|
18.8%
|
Revenue increase vs.
FY 2015
|
14.6%
|
|
|
13.5%
|
|
Net income vs. FY
2015
|
5.0%
|
|
|
9.1%
|
|
NEOGEN CORPORATION
SUMMARIZED CONSOLIDATED
BALANCE SHEET
DATA
(In
thousands)
|
|
May
31
|
May
31
|
|
2016
|
2015
|
|
(Unaudited)
|
(Audited)
|
Assets
|
|
|
Current
assets
|
|
|
Cash &
investments
|
$
107,796
|
$
114,164
|
Accounts
receivable
|
67,652
|
59,208
|
Inventory
|
64,371
|
51,601
|
Other current
assets
|
10,182
|
6,222
|
Total current
assets
|
250,001
|
231,195
|
Property &
equipment, net
|
54,683
|
44,473
|
Goodwill & other
assets
|
147,031
|
116,513
|
Total
assets
|
$
451,715
|
$
392,181
|
Liabilities &
Equity
|
|
|
Current
liabilities
|
$
28,598
|
$
25,456
|
Other long-term
liabilities
|
18,956
|
15,762
|
Equity: Shares
outstanding
37,568 in 2016 &
37,128 in 2015
|
404,161
|
350,963
|
Total liabilities
& equity
|
$
451,715
|
$
392,181
|
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-record-revenues-and-earnings-300300595.html
SOURCE Neogen Corporation