LANSING, Mich., March 29 /PRNewswire-FirstCall/ -- Neogen Corporation announced today that its net income for the third quarter of FY 2010, which ended Feb. 28, increased 38% from the previous year to $3,881,000. Adjusted for a 3-for-2 stock split effective Dec. 15, net income in the quarter rose to $0.17 per share, compared to the prior year’s $0.12.
“We are very pleased to report our exceptional third quarter results, especially considering that many of our customers have been under severe economic stress,” said James Herbert, Neogen’s chief executive officer and chairman. “The broad-based nature of our organic growth, and operating results, indicate significant progress in continuing our plan to ensure long-term growth. I’m very proud of our management team and employee group.”
“It was especially gratifying to see that a significant portion of our third quarter growth was due to increases in same-store sales of key products, including mycotoxin diagnostics and dehydrated culture media on our Food Safety side, and vitamin injectables and biosecurity on our Animal Safety side,” said Lon Bohannon, Neogen’s president and chief operating officer. “The outbreak of vomitoxin in last fall’s corn harvest created a substantial opportunity and we were able to quickly ramp up production to meet the increased demand for test kits to detect this harmful mycotoxin. We believe our quick response to the vomitoxin outbreak is a perfect example of the superior customer and technical service that sets us apart from our competitors.”
“The company continued to generate exceptional cash flow from operations with year-to-date totals of nearly $22,000,000,” said Richard Current, Neogen’s vice president and chief financial officer. “In fact, despite the $6,500,000 BioKits acquisition during the quarter, February cash levels nearly equaled the levels in November. The primary cash generators were control of asset growth by the operating groups and higher levels of net income.”
Sales growth in Food Safety was broad-based across multiple market segments and product lines for the quarter and on a year-to-date basis. Cool, wet weather experienced in the U.S. corn belt in 2009 led to sharp increases in demand for tests to detect mycotoxins, especially vomitoxin. In the quarter, sales of mycotoxin test kits were particularly strong to customers associated with the production of ethanol. Ethanol producers sell the grain by-products of their process to the animal feed industry, and these by-products can contain concentrated levels of any mycotoxins present in commodity grains used to produce ethanol.
Sales of capital equipment and disposable vials associated with Neogen’s Soleris(R) general microbial detection system also exhibited strong growth in the quarter. The Soleris system allows for the accurate detection of spoilage organisms, such as yeast and mold, in much less time than traditional methods.
While the Animal Safety Division’s customers continue to feel the effects of a depressed animal protein market, this division did experience strong increases in sales for a number of products. Sales of rodenticides into domestic markets increased 51% as Neogen continues to grow its market share, and new products gain market acceptance. Sales of vitamin injectables into the livestock market were up 45% over the prior year. Sales of Neogen’s OTC wound treatment products also increased substantially in the current quarter.
Neogen Corporation
