LANSING, Mich., Sept. 24 /PRNewswire-FirstCall/ -- Neogen Corporation announced today that its revenues for the first quarter of FY 2010, which ended Aug. 31, increased 12% from the previous year's first quarter to $32,347,000. First quarter net income increased 18% from the prior year's $3,733,000 to $4,395,000, or to $0.29 per share in the current year compared to the previous year's $0.25.
"The first quarter was a great start for our new fiscal year as our food and animal safety strategy continues to gain worldwide strength," said James Herbert, Neogen's chief executive officer and chairman. "We are able to report that we grew our top line at a double-digit pace, and our profitability at a pace that exceeded revenue growth. These results provide further evidence of improving efficiencies and general operational strength throughout Neogen."
"We are obviously pleased to report that the 23% increase in our operating profit was approximately double the percentage increase in our revenues," said Lon Bohannon, Neogen's president and chief operating officer. "We believe that our growth performance at the operating profit line is evidence of our commitment to control costs as our revenues advance. The only expense category that increased faster than our revenue growth was our planned investment in research and development. We are very pleased to be able to accelerate our R&D spending for Neogen's future, and still report today's exceptional results."
"As our consolidated balance sheet data shows, we had an exceptional quarter generating cash, and we now have more than $23 million in cash and investments to pursue a wide variety of growth strategies," said Richard Current, Neogen's chief financial officer. "Our inventories are down in comparison to our prior quarter, as we continue our progress in controlling the level of inventories without impacting sales. Our accounts receivable have increased slightly, but at a pace less than our sales increase. We continue to monitor the financial health of our customers to avoid collection concerns, and have yet to experience significant receivable problems."
The company's quarterly food safety sales improvement was led by a more than 30% increase in sales of its dairy antibiotic diagnostics. Neogen's product line to detect dairy antibiotics was recently bolstered by the launch of BetaStar((R)) Combo, which is the fastest diagnostic available for detecting beta-lactam and tetracycline antibiotic residues in milk. Tetracyclines are more widely used for treatment of bovine mastitis in the European Union than elsewhere.
Sales of the company's tests for natural toxins increased by 10% in the quarter compared to the prior year's first quarter, led by increases in sales of test kits to detect deoxynivalenol (DON) and histamine. The DON test sales increase came largely as the result of reports of high levels of the mold toxin DON in harvested grain in isolated pockets of the United States, and continuing market acceptance of the company's new test system. Histamine is a toxin produced in certain types of harvested fish, especially tuna, if they are improperly stored and transported.
Sales of veterinary products through over-the-counter distributor channels were led by strong increases in sales of products to treat wounds, and leg and foot conditions. The company's Ideal Instruments brand, including disposable needles and syringes, also had a solid quarter with sales growth of 11% compared to the previous year's first quarter.
Neogen Corporation
