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23-Jul-2019

Neogen reports fiscal 2019 results

LANSING, Mich., July 23, 2019 /PRNewswire/ -- Neogen Corporation (NASDAQ: NEOG) announced today that revenues for the fourth quarter of its 2019 fiscal year, which ended May 31, were $109,762,000, compared to $108,120,000 the prior year quarter. Revenues for the company for the full fiscal year were $414,186,000, compared to the prior year's $397,930,000.

Fourth quarter net income was $15,815,000, or $0.30 per share, compared to the prior year's $17,545,000, or $0.33 per share. Net income for the full 2019 fiscal year was $60,176,000, or $1.15 per share, compared to the prior year's $63,145,000, or $1.21 per share.

"During the year, we made a number of changes that position us well for the future, and we had strong performances in certain areas of the business. Our core domestic food safety diagnostic business had a solid year, increasing revenues 12% compared to the prior year, as we seized existing opportunities by increasing market share and responding to regional outbreaks, and created new opportunities by developing innovative products for the marketplace," said John Adent, Neogen's president and chief executive officer. "Of special note in our 2019 fiscal year was an 11% increase in international sales, despite currency issues, with widespread gains in most geographies. Although it was a difficult year for our Animal Safety segment due to ongoing challenges in the animal protein markets we serve, we produced significant new sales within our veterinary needle and syringe business, and of products for the companion animal market. Our overall genomics business also continued its steady growth, with revenues up 12%, with strong performances throughout our global operations."  

The fourth quarter was the 109th of the past 114 quarters that Neogen reported revenue increases as compared to the same period in the previous year — a record spanning over 28 years.

Gross margins for the company were 46.3% in fiscal 2019, compared to 46.8% in fiscal 2018. The change in margin percentage was the result of product mix shifts within each segment towards products which have lower margins. Operating income was $68.1 million, or 16.4% of sales, in the current fiscal year, compared to $70.2 million, or 17.6%, in the company's 2018 fiscal year. The decline in operating income was due to the lower gross margin percentage and increased operating expenses, with significant spending on new product development.

"If currency rates had been the same as the prior year, revenues for the fourth quarter would have been $2.3 million higher, and revenues for the full year would have been $8.0 million higher. In a neutral currency environment, earnings per share would have been approximately 1.5 cents higher in the fourth quarter, and approximately 5.5 cents higher for the entire year," said Steve Quinlan, Neogen's chief financial officer. "Despite this, fiscal 2019 was another solid year of cash generation; our balance sheet remains strong, and we are well-positioned to pursue our various growth strategies."

Revenues for the company's Food Safety segment increased 10% during the 2019 fiscal year compared to the prior year. The segment's current year results included a 15% increase in sales of test kits to detect natural toxins in grains, including significant increases in sales to detect aflatoxin in corn in Brazil, and deoxynivalenol (DON) in Canada and France. The sales increase in the mycotoxin product line was also aided by the introduction of Neogen's new Raptor® testing platform, which can be used to simplify and quicken the natural toxin testing and results process. 

Compared to the prior year, global sales of Neogen's foodborne pathogen detection tests increased 24% — 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 Nowtest 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 ATP test system, increased 11% in the 2019 fiscal year, and sales of Neogen's rapid diagnostic test kits to detect food allergens, including gluten, milk, soy and peanuts, rose 7% in the current year.

Revenues from international sources increased to 40.1% of total revenues in the current year, compared to 37.6% last year. After adjusting for adverse currency translations, revenues from outside of the United States increased 11% for fiscal 2019. Revenues for our combined European operations increased 8% in U.S. dollars (12% in pounds), Mexico-based Neogen Latinoamerica's sales increased 13% (17% in pesos), and our Brazilian revenues increased 16% (36% in reals) for the year. Neogen's sales performance in Brazil in fiscal 2019 was led by significant increases in forensic kits to test commercial drivers, sales of test kits to detect aflatoxin in corn, and sales of genomic testing services specifically for cattle breeds popular in Brazil (e.g., Nellore). For the current year, Neogen China increased 13% (17% in yuan) and Neogen India increased 71% (86% in rupees) compared to the prior year, albeit from a small base. Revenues from our Australian operation, acquired in September 2017, outperformed expectations in its first full fiscal year.

Neogen's Animal Safety segment reported a 1% revenue decrease for the current year. The segment had good sales growth compared to the prior year in biologics, which was up 12%, and Neogen gained market share in sales of various needles and syringes. These increases were offset by lower sales of animal care products, other veterinary instruments, and rodenticides, due to lost toll manufacturing business. 

Neogen's worldwide animal genomics business recorded a broad-based increase of 12% in fiscal 2019 compared to the prior year. The solid performance in this business was due to strong increases in beef sales in key global markets such as the United States, Europe, Brazil and Australia, due to new products and increased market penetration. Other major factors positively impacting the business were significant increases in companion animal testing.

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.

CONTACT:    Steve Quinlan, Vice President & CFO
                       
Neogen Corporation, 517/372-9200

 

 

NEOGEN CORPORATION UNAUDITED SUMMARIZED CONSOLIDATED OPERATING DATA

(In thousands, except for per share and percentages)



Quarter ended May 31


Year ended May 31



2019



2018



2019



2018

Revenue

Food Safety

$

56,428


$

51,667


$

213,474


$

194,477

Animal Safety


53,334



56,453



200,712



203,453

Total revenue


109,762



108,120



414,186



397,930

Cost of sales


59,232



59,622



222,266



211,659

Gross margin


50,530



48,498



191,920



186,271

Operating expenses

Sales & marketing


17,776



17,488



70,230



66,929

Administrative


10,454



9,197



40,791



38,294

Research & development


3,570



1,954



12,805



10,855

Total operating expenses


31,800



28,639



123,826



116,078

Operating income


18,730



19,859



68,094



70,194

Other income


768



36



4,865



3,271

Income before tax


19,498



19,895



72,959



73,465

Income tax


3,683



2,350



12,783



10,250

Net income

$

15,815


$

17,545


$

60,176


$

63,215

Net (income) attributable
   to non-controlling interest


 

0



 

0



 

0



 

(70)

Net income attributable to Neogen Corp

$

15,815


$

17,545


$

60,176


$

63,145

Net income attributable to Neogen Corp












per diluted share

$

0.30


$

0.33


$

1.15


$

1.21


Other information:

Shares to calculate per share


52,526



52,449



52,425



52,149

Depreciation & amortization

$

4,596


$

4,377


$

17,624


$

17,058

Interest income


1,395



757



4,705



2,101

Gross margin (% of sales)


46.0%



44.9%



46.3%



46.8%

Operating income (% of sales)


17.1%



18.4%



16.4%



17.6%

Revenue increase vs. FY 2018


1.5%






4.1%




Net income vs. FY 2018


-9.9%






-4.7%




 

 

NEOGEN CORPORATION UNAUDITED SUMMARIZED

CONSOLIDATED BALANCE SHEET DATA

(In thousands)



May 31



May 31



2019



2018







Assets






Current assets






Cash & investments

$

267,524


$

210,810

Accounts receivable


82,582



79,086

Inventory


85,992



76,005

Other current assets


13,431



9,888

Total current assets


449,529



375,789

Property & equipment, net


74,847



73,069

Goodwill & other assets


171,364



169,151

Total assets

$

695,740


$

618,009







Liabilities & Equity






Current liabilities

$

38,251


$

38,688

Non-current liabilities


19,590



19,146

Equity: Shares outstanding
    52,217 in 2019 & 51,736 in 2018


 

637,899



 

560,175

Total liabilities & equity

$

695,740


$

618,009

 

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SOURCE Neogen Corporation

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Last Updated: 23-Jul-2019