Neogen reports record quarterly earnings per share
LANSING, Mich., Sept. 30, 1999 - Neogen Corporation (NASDAQ:NEOG) today reported the highest earnings per share for any quarter in the Company's 17-year history.
Neogen reported first quarter earnings of $807,749, or $0.14 a share, as compared to $817,021, or $0.13 per share, in the first quarter of last fiscal year. The earnings performance exceeded internal expectations.
"We knew we were in for an extremely tough quarter-to-quarter comparison because last year's first quarter was outstanding," said Lon Bohannon, Neogen's chief operating officer. "But, we feel like we have been doing a good job of controlling our costs. We made some moves last quarter that had a short-term adverse impact on our earnings knowing we would achieve a long-term benefit. Those moves, along with our stock repurchase program, helped contribute to our record earnings performance."
Last year's fourth quarter consolidation of manufacturing operations led to overall lower operating costs in the first quarter this year. In addition, the Company's legal and professional fees declined sharply in the first quarter compared to the prior year.
First quarter sales efforts were led by a 37% increase in sales of test kits to detect harmful bacteria, such as E. coli O157:H7, Salmonella and Listeria. Sales of test kits to detect food allergens, such as peanut and egg residues, also increased sharply in the first quarter.
Overall, sales for the quarter were off slightly from last year's exceptional first quarter. Neogen's total sales for the quarter were $5,340,301, compared to fiscal year's 1999 first quarter of $5,716,555. The overall decline was split between the Company's two divisions; its Food Safety Division's sales were off $214,000 from last year, and its Animal Safety Division saw a drop of $162,000.
Food Safety sales were affected by the loss of human clinical sales as a result of Neogen's sale of the product line in the fourth quarter of last year. A much better growing season in the United States in 1999 than in the drought-stricken 1998 led to a decline in sales of naturally-occurring toxin test kits compared to last year. Animal Safety sales were lower due exclusively to the interruption in the supply of two products sold to the professional equine market. Both products in short supply in the first quarter are expected to be back in inventory and available for sale in the second quarter.
"Overall, we were very happy with our sales," said James Herbert, Neogen president. "We came in very close to our budgets, as we did not expect to repeat the unique conditions that existed last year. Going forward, we believe our recent exclusive distributorship agreement with Biotrace and new product offerings, such as our new campylobacter and egg allergen tests, will help return our revenues to the kind of growth we have experienced in the last two years."
On Sept. 1, Neogen entered into an agreement to become the exclusive distributor of Biotrace rapid sanitation testing systems for the North American food and beverage market. Biotrace International, Plc., is considered the global leader in this market with its Uni-Lite XCEL, Clean-Trace and Aqua-Trace products. This agreement has also allowed Biotrace to merge a significant portion of its product management and technical support with Neogen's existing organization.
Neogen recently released a test to detect the number one bacterial cause of domestic foodborne illness-campylobacter. The Centers for Disease Control and Prevention (CDC) just-released report on food-related illness and death in the United States reports that campylobacter are responsible for approximately one-half of all bacteria-caused foodborne illness in the country. Campylobacter are found in the intestinal tracts of people and animals, but its most dangerous strain, Campylobacter jejuni, is most often associated with raw chicken. The most common symptoms of campylobacter infection, campylobacteriosis, are mild to severe diarrhea, fever, nausea, vomiting and abdominal pain. Campylobacter infection has also been linked with Guillain-Barr‚ Syndrome, an autoimmune attack on the peripheral nerves that can cause weakness and paralysis.
With the campylobacter test, Neogen also released a new test for E. coli O157 as a complement to its existing test for E. coli O157:H7. The new test utilizes a format designed for the high-volume tester who is looking for a quick screening tool for a large number of samples-up to 94 samples per test kit. The test enables food processors and laboratories to quickly, and safely, release product that has tested negative for the dangerous pathogen.
The campylobacter and E. coli O157 tests add to Neogen's extensive line of rapid test kits to detect foodborne pathogens, which also includes kits for Salmonella and Listeria.
Neogen's Alert for Egg Allergen screening test recently joined the Veratox for Egg Allergen quantitative test in the Company's food allergen product line. The Alert for Egg Allergen is designed for companies that wish to have a simple yes/no result when testing to determine if a sample or swab of a surface contains egg residues.
Neogen Corporation is a Lansing, Michigan based company that develops and markets products and services dedicated to food and animal safety. The Company's Food Safety Division markets diagnostic test kits to detect foodborne bacteria, natural toxins, food allergens, drug residues, plant diseases and sanitation concerns. Neogen's Animal Safety Division markets a complete line of veterinary instruments and a line of premium equine health care products.
NEOGEN CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS
For three months ended Aug. 31
1999 1998
Sales $5,340,301 $5,716,555
Net Income 807,749 817,021
Net Income Per Share - Diluted $0.14 $0.13
Average Shares Outstanding 5,959,380 6,281,422 |
