My conference call notes: (1:00 PM September 23rd)
The call was very upbeat with analysts adding comments to their
questions like, Great Quarter!, Very Good Quarter! We are going
to be raising our estimates...
Reviewed quarter financial results
10 Cents EPS
Rev up 10%
Very good quarter compared to last years
first quarter especially seeings how last years
results were extraordinary because of wheat crop
problem that racked up sales of vomitoxin(sp?) kits
(there is no wheat crop problem this year and we still
had our revenues increase significantly with our
current normal business)
69% increase in bacteria test kits business
Triple Crown acquisition completed in July
($1.6 million sales last year)
Two new products
listeria - seafood, cheese, sausage, hotdogs, processed food...
bioplate - E coli type 1 for meat
Joe Madden (FDA fame) should start in November
USDA regulations:
Wants recall authority and right to penalize (in congress)
Fruit and vegetable suppliers are voluntarily complying
with testing regulations
January 17, 1998 is the big date for the new regulations
to significantly kick in for meat and poultry companies.
More regulations to be phased in over two years
(until January 2000)
Acquisitions - they have a couple of companies in their sites
Questions
Ask about the number of outstanding shares? (Rooney Brokerage)
answer: 6.4 million
What products account for greatest revenue?
answer: diagnostic tests for micro-organisms
Is irradiation of food a competitive concern? (Ohio Company)
answer: not really, public sentiment is against it and
the facilities to handle the tons of food involved would
be very expensive
How much revenue came from Triple Crown this quarter?
answer: $300,000 (starting in July)
So your revenue has grown to $5 million a quarter?
answer: <stone walled>
Was the Hudson Food's incident a boost to sales?
answer: Some.. since then we have picked up what we
consider 19 new significant customers.
They would not mention the customers by name.
Hudson was not a customer.
A DEAN WHITER analyst ask (large national broker! ALL RIGHT!)
What is the current size of the food testing industry?
answer: they believe it will be $500 million with the new
USDA regulations phased in and they explained where that
figure came from (independant market research - didn't
catch the name). The current market the believe
today is $100 million of which 86% is not penetrated,
that being that the 86% is either not testing
or are using laboratories for testing instead
of using test kits. Their current business is coming
from the 14%.
Compare your E.coli test to Meridian Diagnostic's test?
answer: they started to explain the misinformation
that was in the press about Meridian's test, like
that it is not a few minute test, it requires an
incubation period of hours, also that the USDA
has not indorsed Meridian's test and in fact use
Neogen's kit.
1:30 PM Eastern time
<at this point I had to drop out of the conference call>
Best Regards,
Kevin Kramer |
