LANSING, Mich., March 26, 2019 /PRNewswire/ -- Neogen
Corporation (NASDAQ: NEOG) announced today that its revenues for
the third quarter of its 2019 fiscal year, which ended Feb. 28, were $97,700,000, up 3% from the previous year's third
quarter revenues of $94,903,000.
Current year-to-date revenues were $304,424,000, up 5% compared to $289,811,000 for the same period a year ago.
Third quarter net income was $13,073,000, compared to the prior year's
$16,586,000. Earnings per share in
the current quarter were $0.25,
compared to $0.32 a year ago. Last
year's third quarter included favorable tax adjustments totaling
$2.9 million resulting from corporate
tax reform enacted in December 2017.
Current year-to-date net income was $44,361,000, or $0.85 per share, compared to $45,600,000, or $0.88 per share, for the same period a year
ago.
"The quarterly results we are reporting today reflect a number
of challenges in the quarter, including continued weakness in the
global animal protein market and currency translation headwinds,"
said John Adent, Neogen's president
and chief executive officer. "While the results were disappointing
in our animal safety operations, we did have strong performances in
a number of core food safety and genomic product lines. Going
forward, we are continuing to execute the proven strategies that
have enabled us to achieve our historical record of growth, while
also implementing a number of programs to address weakness in some
Animal Safety end markets."
The third quarter was the 108th of the past 113 quarters that
Neogen reported revenue increases as compared with the previous
year — including all consecutive quarters in the past 13 years.
"International revenues and earnings continued to show good
growth for the quarter. This was even despite a strong negative
currency conversion," said James
Herbert, Neogen's chairman. "For the quarter, international
revenues are 9% higher than last year, and increased to 41.2% of
overall revenues, compared to 39.1% in the prior year."
Neogen's gross margin was 45.7% of sales in the third quarter of
the current year, compared to 47.0% in the same quarter of the
prior fiscal year. The gross margin percentage decrease was
primarily the result of mix shifts within both the Food Safety and
Animal Safety segments towards products that have gross margins
lower than the segment's historical average, and adverse effects
from the strengthening U.S. dollar. Expressed as a percentage of
sales, operating income was 15.0% for the current quarter, compared
to 16.8% in the third quarter of the 2018 fiscal year.
"If you compare the current quarter to the prior year's third
quarter in a neutral currency environment, we would have reported
$2.5 million more in revenues in the
current quarter. This negative currency translation effect is
primarily due to weakening currencies against the dollar in
Brazil and the United Kingdom. Year-to-date, comparative
revenues were approximately $5.8
million less due to currency translations," said
Steve Quinlan, Neogen's chief
financial officer. "Our net income comparison to the prior year
quarter was adversely affected by the prior year's unusually low 4%
effective tax rate, which was the result of corporate tax reform in
that period. The current quarter's effective tax rate of 21% is
representative of the 'new normal'."
Revenues for the company's Food Safety segment increased 8%
during the third quarter compared to the prior year quarter. Sales
of Neogen's rapid diagnostics to detect natural toxins increased
17% in the current quarter, including a 35% increase in sales to
detect the mycotoxin deoxynivalenol (DON) in grain. The improvement
in sales of DON test kits was boosted by the increasing adoption of
Neogen's new Raptor® testing platform, which
automatically analyzes up to three samples independently and
simultaneously. A 26% increase in sales of the company's rapid
tests for histamine also contributed to the increase in sales of
natural toxin tests for the quarter. Histamine is a spoilage toxin
produced when certain species of fish, especially tuna, are
improperly stored following harvest.
Compared to the prior year quarter, sales of Neogen's foodborne
pathogen detection tests increased 16% — including a 45% increase
in sales of tests to detect Listeria. This growth was
largely the result of a nearly five-fold increase in sales of the
company's innovative Listeria Right Now™ test
system, which detects Listeria in environmental samples in
under 60 minutes — without the need to enrich samples.
Sales of the company's general sanitation products, including
its AccuPoint® Advanced product line, increased 11% in
the third quarter of the 2019 fiscal year, compared to prior year.
Sales of its rapid diagnostics to detect food allergens, including
gluten, milk, soy and peanuts, increased 7% in the current
quarter.
Despite the adverse currency translations in the current
quarter, Neogen's European operations revenues rose 11%, aided by
growth in genomics services and stronger sales of DON test kits.
Revenues from the company's food safety operations in Brazil rose 40%, and its Mexico-based operations grew 19%. Neogen
India's sales increased 94%,
albeit from a small base, and Neogen China's revenues increased 9%,
each on increases across their product offerings. Revenues from
Neogen Australasia, which Neogen acquired in September 2017, more than doubled in the current
quarter compared to the prior year.
Neogen's Animal Safety segment reported a 2% revenue decrease
for the third quarter, largely the result of lower sales of
products to distributor partners into the animal protein market,
including rodent and insect control products. End markets have been
affected by difficult economic conditions in the production animal
markets, exacerbated by tariff disputes between the U.S. and
China. However, sales of the
company's detectable needles rose 17% while cleaners and
disinfectants increased 18% and vaccines rose 13%.
Neogen's worldwide animal genomics business recorded an increase
of 15% in the third quarter of fiscal 2019 compared to the prior
year. This broad-based increase was aided in part by strong revenue
increases from its genomics laboratories in Scotland, Australia, and Brazil, and included revenue increases from
genomic testing of beef and dairy cattle, swine, poultry, and
companion animals around the world.
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 worldwide biosecurity products, animal
genomics testing, and the manufacturing and distribution of a
variety of animal healthcare products, including diagnostics,
pharmaceuticals and veterinary instruments.
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
|
|
Nine months ended
Feb. 28
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
Revenue
|
Food Safety
|
$
|
51,113
|
|
$
|
47,313
|
|
$
|
157,046
|
|
$
|
142,810
|
Animal
Safety
|
|
46,587
|
|
|
47,590
|
|
|
147,378
|
|
|
147,001
|
Total
revenue
|
|
97,700
|
|
|
94,903
|
|
|
304,424
|
|
|
289,811
|
Cost of
sales
|
|
53,072
|
|
|
50,302
|
|
|
163,034
|
|
|
152,037
|
Gross
margin
|
|
44,628
|
|
|
44,601
|
|
|
141,390
|
|
|
137,774
|
Operating
expenses
|
Sales &
marketing
|
|
16,722
|
|
|
16,572
|
|
|
52,454
|
|
|
49,442
|
Administrative
|
|
10,018
|
|
|
9,280
|
|
|
30,337
|
|
|
29,096
|
Research &
development
|
|
3,249
|
|
|
2,836
|
|
|
9,235
|
|
|
8,901
|
Total operating
expenses
|
|
29,989
|
|
|
28,688
|
|
|
92,026
|
|
|
87,439
|
Operating
income
|
|
14,639
|
|
|
15,913
|
|
|
49,364
|
|
|
50,335
|
Other
income
|
|
1,984
|
|
|
1,368
|
|
|
4,097
|
|
|
3,235
|
Income before
tax
|
|
16,623
|
|
|
17,281
|
|
|
53,461
|
|
|
53,570
|
Income tax
|
|
3,550
|
|
|
700
|
|
|
9,100
|
|
|
7,900
|
Net income
|
$
|
13,073
|
|
$
|
16,581
|
|
$
|
44,361
|
|
$
|
45,670
|
Net (income)
attributable
to non-controlling interest
|
|
0
|
|
|
5
|
|
|
0
|
|
|
(70)
|
Net income
attributable to Neogen Corp
|
$
|
13,073
|
|
$
|
16,586
|
|
$
|
44,361
|
|
$
|
45,600
|
Net income
attributable to Neogen Corp
|
|
|
|
|
|
|
|
|
|
|
|
per diluted
share
|
$
|
0.25
|
|
$
|
0.32
|
|
$
|
0.85
|
|
$
|
0.88
|
|
Other
information:
|
Shares to calculate
per share
|
|
52,472
|
|
|
52,237
|
|
|
52,448
|
|
|
52,014
|
Depreciation &
amortization
|
$
|
4,431
|
|
$
|
4,414
|
|
$
|
13,028
|
|
$
|
12,682
|
Interest
income
|
|
1,335
|
|
|
524
|
|
|
3,290
|
|
|
1,322
|
Gross margin (% of
sales)
|
|
45.7%
|
|
|
47.0%
|
|
|
46.4%
|
|
|
47.5%
|
Operating income (% of
sales)
|
|
15.0%
|
|
|
16.8%
|
|
|
16.2%
|
|
|
17.4%
|
Revenue increase vs.
FY 2018
|
|
2.9%
|
|
|
|
|
|
5.0%
|
|
|
|
Net income vs. FY
2018
|
|
-21.2%
|
|
|
|
|
|
-2.7%
|
|
|
|
NEOGEN CORPORATION
UNAUDITED SUMMARIZED
CONSOLIDATED
BALANCE SHEET DATA
(In
thousands)
|
|
|
Feb.
28
|
|
|
May
31
|
|
|
2019
|
|
|
2018
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash &
investments
|
$
|
246,680
|
|
$
|
210,810
|
Accounts
receivable
|
|
80,011
|
|
|
79,086
|
Inventory
|
|
84,870
|
|
|
76,005
|
Other current
assets
|
|
11,041
|
|
|
9,888
|
Total current
assets
|
|
422,602
|
|
|
375,789
|
Property &
equipment, net
|
|
76,453
|
|
|
73,069
|
Goodwill & other
assets
|
|
173,530
|
|
|
169,151
|
Total
assets
|
$
|
672,585
|
|
$
|
618,009
|
|
|
|
|
|
|
Liabilities &
Equity
|
|
|
|
|
|
Current
liabilities
|
$
|
34,268
|
|
$
|
38,688
|
Non-current
liabilities
|
|
18,401
|
|
|
19,146
|
Equity: Shares
outstanding
52,120 in Feb. & 51,736 in May
|
|
619,916
|
|
|
560,175
|
Total liabilities
& equity
|
$
|
672,585
|
|
$
|
618,009
|
CONTACT: Steve
Quinlan, Vice President &
CFO
Neogen Corporation, 517/372-9200
View original
content:http://www.prnewswire.com/news-releases/neogen-reports-third-quarter-results-300818492.html
SOURCE Neogen Corporation