Neogen reports record revenues, earnings
2017 fiscal year income up 20 percent
Neogen Corp.’s net income for the fourth quarter of its 2017 fiscal year, which ended May 31, was $12.5 million, or $0.32 per fully diluted share, an increase of 27 percent from $9.9 million, or $0.26 per share, in fiscal 2016. Net income for the 2017 fiscal year increased 20 percent to $43.8 million, or $1.14 per share, compared with the prior year’s $36.6 million, or $0.97 per share.
Revenues for the fourth quarter of its 2017 fiscal year were $98.8 million, an increase of 10 percent compared with the prior year quarter. Revenues for the entire fiscal 2017 increased 13 percent to $361.6 million from the prior year’s $321.3 million.
This increase was aided by recent acquisitions completed by the company, and was achieved despite adverse top line currency adjustments of approximately $7.2 million for the full year resulting from strength of the U.S. dollar in Neogen’s international markets. Revenues and net income for the fourth quarter, and the 2017 fiscal year, established new all-time highs for the 35-year-old company.
“We are pleased to report a solid 2017 fiscal year performance and an even stronger position to continue to expand in the future,” said James Herbert, Neogen’s executive chairman. “We believe that our broad portfolio of innovative products and services sets us apart globally. We have a shared vision with the world’s food and animal producers that seek to produce food products that are safe and of high quality.”
The fourth quarter was the 101st of the past 106 quarters that Neogen reported revenue increases as compared with the previous year — including all consecutive quarters in the past 12 years.
“Our fiscal 2017 was yet another year where we were able to deliver solid operational results and launch new products and services to drive future growth,” said Richard Calk Jr., Neogen’s president and chief operating officer. “Our fiscal 2017 acquisitions of England-based Quat-Chem and Brazil-based Rogama expanded our biosecurity product portfolio and production capabilities. We can now produce and sell cleaners, disinfectants and rodenticides competitively in worldwide markets critical to the global food supply.”
Gross margins for the company were 47.6 percent in both fiscal 2017 and fiscal 2016. Operating income was $64.9 million, or 18.0 percent of sales, in the current fiscal year, compared to $56.4 million, or 17.6 percent, in the company’s 2016 fiscal year.
“Although currency pressures continued to negatively impact us in fiscal 2017, the U.S. dollar did weaken somewhat in the fourth quarter,” said Steve Quinlan, Neogen’s chief financial officer. “In spite of the adverse currency impact in fiscal 2017, the company had another strong year of cash generation, and our cash position gives us great flexibility in pursuing our growth strategy going forward.”
After currency translations, revenues from Neogen’s Scotland-based subsidiary increased 13 percent for the 2017 fiscal year on strong sales of mycotoxin test kits and genomics services; Mexico-based Neogen Latinoamerica’s sales decreased 7 percent, but rose 6 percent in local currency; and Neogen do Brasil’s revenues increased 65 percent on higher sales of drug detection and drug residue test kits. Neogen recorded a 24 percent increase in sales into China as the company continues to expand its markets.