An email has been sent to your address with instructions for changing your password.
There is no user registered with this email.
Sign Up
To create a free account, please fill out the form below.
Thank you for signing up!
A confirmation email has been sent to your email address. Please check your email and follow the instructions in the message to complete the registration process. If you do not receive the email, please check your spam folder or contact us for assistance.
Welcome to our platform!
Oops!
Something went wrong while trying to create your new account. Please try again and if the problem persist, Email Us to receive support.
Neogen Corporation (NASDAQ: NEOG) reported a 7% revenue increase to $115 million for Q2 FY2021, up from $107.8 million last year. Year-to-date revenues reached $224.3 million, also up 7%. Net income for Q2 was $15.9 million, down from $16.3 million, with earnings per share at $0.30. Despite a 13% sales increase in the animal safety segment, gross margin fell to 46.3% due to a shift in product mix. The food safety segment saw a 1% revenue rise, bolstered by new product launches. However, currency headwinds and COVID-19 disruptions impacted performance.
Positive
7% revenue growth in Q2 FY2021 to $115 million.
13% sales increase in animal safety segment.
Successful launch of Soleris Next Generation system.
International sales growth: 59% in China, 81% in Australasia.
Negative
Net income decreased to $15.9 million from $16.3 million.
Gross margin fell to 46.3% from 47.3%.
COVID-19 disruptions affected food safety sales.
Currency headwinds reduced revenues by $1.2 million.
LANSING, Mich., Dec. 22, 2020 /PRNewswire/ -- Neogen Corporation (NASDAQ: NEOG) announced today that revenues for the second quarter of its 2021 fiscal year, which ended Nov. 30, were $115,000,000, a 7% increase compared to the previous year's second quarter revenues of $107,803,000. Current year-to-date revenues were $224,325,000, also an increase of 7%, compared to $209,227,000 for the same period a year ago.
Second quarter net income was $15,885,000, or $0.30 per share, compared to the prior year's $16,276,000, or $0.31 per share. Current year-to-date net income was $31,745,000, or $0.60 per share, compared to $30,928,000, or $0.59 per share, for the same period a year ago.
"We are pleased to report growth across our business during the quarter, even as we continue to fight global market disruptions caused by the resurgent COVID-19 pandemic. We recorded a strong 13% sales increase in our animal safety segment, while also reporting significant sales increases in our new food safety product offerings," said John Adent, Neogen's president and chief executive officer. "While much uncertainty remains, we are seeing indications that we are on the road to recovery, with successful new product launches, and strong sales increases across our diverse product portfolio in countries now less affected by COVID, including China and Australia."
Neogen's gross margin was 46.3% of sales in its second quarter of the current year, compared to 47.3% recorded in the same quarter of the prior fiscal year. The change in margin percentage was the result of a product mix shift towards Animal Safety products, which have lower margins. Sales of food safety products continued to be adversely affected by the COVID-19 global pandemic.
During the quarter, the company incurred nearly $1 million in expenses for strategic consulting, due diligence and other professional fees, the result of acquisition activities that were ultimately not completed; these non-recurring expenses reduced earnings by approximately $0.02 per share. Operating income was $19,245,000, or 16.7% of sales, for the second quarter, compared to $18,272,000, or 16.9%, in the same quarter a year ago. Interest income declined $716,000 from last year's second quarter, due primarily to the precipitous drop in interest rates on our marketable securities.
"We continue to proactively address issues associated with the ongoing difficult operating environment, including strengthening our global supply chain and adequately staffing our worldwide operations," said Steve Quinlan, Neogen's chief financial officer. "Although currency headwinds resulted in comparative revenues being reduced by approximately $1.2 million during the quarter, entirely in the Food Safety segment, this is an improvement over the first quarter as the U.S. dollar has recently weakened somewhat against a number of currencies in countries where we do business."
Revenues for the company's Food Safety segment increased 1% during the second quarter compared to the prior year quarter, from $56,854,000 to $57,534,000. The segment's performance benefitted from a 13% increase in sales of its Soleris® microbial testing system compared to the prior year quarter. In July 2020, Neogen launched its Soleris Next Generation (NG) system that can rapidly detect a wide variety of microorganisms that threaten the safety and quality of food and other consumer products, and it has gained robust initial market acceptance. The current quarter also featured a 6% increase in sales of the company's Listeria Right Now™ test system, which detects and reports bacteria in environmental samples in under 60 minutes — without the need to enrich samples. The segment's sales performance was also aided by new sales from recently acquired businesses in Italy, Argentina, Uruguay, and Chile. These increases were offset by flat sales growth of its natural toxins and food allergen product lines, and reductions in sales of foodborne pathogen (8%), general sanitation (8%) and culture media (3%) products, all caused in part by COVID-19-related disruptions in many of the company's end markets.
Neogen's Animal Safety segment reported revenues of $57,466,000 for the second quarter of the 2021 fiscal year, compared to $50,949,000 in the prior year second quarter — an increase of 13%. This increase was driven by continued new sales of cleaners and disinfectants used to fight the spread of COVID-19; a 24% increase in sales of rodenticides as the U.S. Pacific Northwest continues to fight rodent pressure; and large increases in sales of genomic testing services, insecticides (aided by the July 2020 acquisition of Elanco's StandGuard® product), animal care products, and needles and syringes — when compared to the prior year's second quarter, as animal protein markets gained strength.
International highlights for the current quarter included a 59% increase in sales at Neogen China, including significant increases in sales of disinfectants and genomic products as the nation recovers from its COVID-19 and African swine fever outbreaks, and a 13% increase in Mexico and Central America driven by sales increases in cleaners and disinfectants, rodenticides, detectable needles, and genomics. Neogen Australasia's quarterly revenue increased 81%, including strong sales gains for genomic and animal safety products, as well as new sales from the March 2020 acquisition of a former distributor of Neogen's food safety products. Neogen's sales in the current quarter also increased 9% at our U.K. operations, led by strength in sales of cleaners and disinfectants, and 5% in India. Revenues declined 22% in Brazil, as a large, one-time sale of insecticides in the prior year quarter did not recur, and as the result of adverse currency impact due to the 25% devaluation of the real against the dollar.
Revenues from Neogen's worldwide animal genomics business increased 12% in the second quarter of fiscal 2021 compared to the prior year, led by increases in companion animal genomic testing due to a surge in COVID-19-related pet adoptions and continued penetration into the veterinary markets, and testing through beef and dairy breed associations. Internationally, Neogen's genomic sales increased in Australia (mainly bovine and canine), China (dairy cattle and porcine as the country recovers from an outbreak in African swine fever), and Latin America (dairy cattle). Neogen recently launched Igenity® Canine Wellness, a preventative care DNA screening tool.
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 Nov. 30
Six months ended Nov. 30
2020
2019
2020
2019
Revenue
Food Safety
$
57,534
$
56,854
$
111,719
$
107,876
Animal Safety
57,466
50,949
112,606
101,351
Total revenue
115,000
107,803
224,325
209,227
Cost of sales
61,786
56,777
120,809
110,007
Gross margin
53,214
51,026
103,516
99,220
Operating expenses
Sales & marketing
17,729
17,988
34,245
35,531
Administrative
12,184
10,985
23,197
21,684
Research & development
4,056
3,781
7,934
7,469
Total operating expenses
33,969
32,754
65,376
64,684
Operating income
19,245
18,272
38,140
34,536
Other income
90
954
1,005
2,342
Income before tax
19,335
19,226
39,145
36,878
Income tax
3,450
2,950
7,400
5,950
Net income
$
15,885
$
16,276
$
31,745
$
30,928
Net income per diluted share
$
0.30
$
0.31
$
0.60
$
0.59
Other information:
Shares to calculate per share
53,404
52,876
53,300
52,712
Depreciation & amortization
$
4,803
$
4,548
$
9,523
$
8,985
Interest income
555
1,271
1,277
2,781
Gross margin (% of sales)
46.3%
47.3%
46.1%
47.4%
Operating income (% of sales)
16.7%
16.9%
17.0%
16.5%
Revenue vs. FY 2020
6.7%
7.2%
Net income vs. FY 2020
-2.4%
2.6%
NEOGEN CORPORATION UNAUDITED SUMMARIZED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
Nov. 30
May 31
2020
2020
Assets
Current assets
Cash & investments
$
390,765
$
343,673
Accounts receivable
79,931
84,681
Inventory
92,529
95,053
Other current assets
15,201
13,999
Total current assets
578,426
537,406
Property & equipment, net
83,774
78,671
Goodwill & other assets
183,426
181,105
Total assets
$
845,626
$
797,182
Liabilities & Equity
Current liabilities
$
44,587
$
48,489
Non-current liabilities
23,644
23,516
Equity: Shares outstanding 53,244 at Nov. 30 & 52,946 at May 31
View original content:http://www.prnewswire.com/news-releases/neogen-reports-second-quarter-results-301197509.html