Neogen Corp. (NEOG, Financial) filed Quarterly Report for the period ended 2008-11-30.
Neogen Corporation develops manufactures and markets a diverse line ofproducts dedicated to food and animal safety. The company's food safety segment consists primarily of diagnostic test kits and related products including dehydrated culture media marketed to food producers and processors to aid in the detection of foodborne bacteria natural toxins food allergens drug residues pesticide residues plant disease infections and levels of general sanitation. Neogen Corp. has a market cap of $340.17 million; its shares were traded at around $23.74 with a P/E ratio of 24.6 and P/S ratio of 3.32. Neogen Corp. had an annual average earning growth of 23.4% over the past 10 years. GuruFocus rated Neogen Corp. the business predictability rank of 3.5-star.
In the Animal Safety Segment, Life Science and Equine Vaccine product revenues increased 25% in the second quarter and 14% for the year-to-date periods. Revenues in this category increased for the three and six-month periods as a result of increased sales to existing customers and instrument sales to forensic customers and expanded domestic distribution vaccines. Rodenticide and Disinfectant revenues increased by 67% in the quarter and by 70% on a year-to-date basis. Rodenticides and Disinfectant revenues increased for the three and six-month periods following the acquisition of a disinfectant product line from DuPont. On an organic basis revenues in this category decreased in the three-month period by 2% but increased on a year-to-date basis by 5%. Veterinary Instrument and Other product revenues increased by 4% in the quarter and by 19% in the first six months of the fiscal year. Revenues for products in this category were up following the acquisitions of Kane Enterprises and Rivard, market share gains for instruments, syringes, wound care products and due to gain with customers selling directly in the retail market. Exclusive of the revenues acquired in the Kane, Rivard and Dupont acquisitions, revenues of Animal Safety products increased 3% in the second quarter over the prior year and by 8% in the six-month period.
Gross margins decreased from 52.1% in the prior year to 51.7% in the second quarter of FY-09 and declined from 52.8% to 51.6% for the year-to-date period. These changes in the second quarter resulted from product mix, the effect of the Kane, Rivard and DuPont acquisitions and changes in value relationships of the Euro and the Pound Sterling and the US Dollar.
Operating margins increased in the quarter and the six-month period from 17.6% to 18.8% and from 18.6% to 19.2% respectively. The gains resulted from continued cost control efforts, economies of scale with added revenues, all net of the effect of changes in gross margins. The company has had some increases in raw material costs and has been able to recover a portion though increases in sales prices. The Company continues to be committed to adjusting prices to protect margins.
Sales and Marketing expense as a percentage of revenues decreased in the second quarter from 20.1% to 19.3% and decreased on a year to date basis from 20.2% to 19.4%. The decrease in selling cost as a percent of revenue reflects the increased revenues without a commensurate increase in selling and distribution costs.
General and Administrative expense as a percentage of revenues declined in the second fiscal quarter from 10.5% to 9.7% and from 10.4% to 9.4% on a year-to-date basis. Changes in administrative expense as a percentage of revenue represent the effect of increased revenues without a commensurate increase in expenses.
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10-year financial history of NEOG.
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Neogen Corporation develops manufactures and markets a diverse line ofproducts dedicated to food and animal safety. The company's food safety segment consists primarily of diagnostic test kits and related products including dehydrated culture media marketed to food producers and processors to aid in the detection of foodborne bacteria natural toxins food allergens drug residues pesticide residues plant disease infections and levels of general sanitation. Neogen Corp. has a market cap of $340.17 million; its shares were traded at around $23.74 with a P/E ratio of 24.6 and P/S ratio of 3.32. Neogen Corp. had an annual average earning growth of 23.4% over the past 10 years. GuruFocus rated Neogen Corp. the business predictability rank of 3.5-star.
Highlight of Business Operations:
Neogen Corporation revenues increased by 15% in the second quarter to $31.2 million and by 20% to $60.0 million for the six-month period ended November 30, 2008 when compared to the prior year. Food Safety sales increased by 6% and 10% in the quarter and in the six-month period ended November 30, 2008, respectively. Animal Safety sales increased by 24% and 33% in the quarter and in the six-month period ended November 30, 2008, respectively. Exclusive of the revenues from the Kane Enterprises, Rivard and DuPont acquisitions, overall revenues increased 5% and 8% in the second quarter and year-to-date periods, respectively. Gross margins decreased from 52.1% in the November 2007 quarter to 51.7% in the November 2008 quarter and declined from 52.8% to 51.6% on a year-to-date basis. The effects of changes in currency values, product mix and acquisitions were the most significant contributors in the reduction in gross margins. Operating margins increased in the quarter and six-month periods from 17.6% to 18.8% and from 18.6% to 19.2% respectively. The gains were the result of continuing cost control efforts and the effect of the acquisitions.In the Animal Safety Segment, Life Science and Equine Vaccine product revenues increased 25% in the second quarter and 14% for the year-to-date periods. Revenues in this category increased for the three and six-month periods as a result of increased sales to existing customers and instrument sales to forensic customers and expanded domestic distribution vaccines. Rodenticide and Disinfectant revenues increased by 67% in the quarter and by 70% on a year-to-date basis. Rodenticides and Disinfectant revenues increased for the three and six-month periods following the acquisition of a disinfectant product line from DuPont. On an organic basis revenues in this category decreased in the three-month period by 2% but increased on a year-to-date basis by 5%. Veterinary Instrument and Other product revenues increased by 4% in the quarter and by 19% in the first six months of the fiscal year. Revenues for products in this category were up following the acquisitions of Kane Enterprises and Rivard, market share gains for instruments, syringes, wound care products and due to gain with customers selling directly in the retail market. Exclusive of the revenues acquired in the Kane, Rivard and Dupont acquisitions, revenues of Animal Safety products increased 3% in the second quarter over the prior year and by 8% in the six-month period.
Gross margins decreased from 52.1% in the prior year to 51.7% in the second quarter of FY-09 and declined from 52.8% to 51.6% for the year-to-date period. These changes in the second quarter resulted from product mix, the effect of the Kane, Rivard and DuPont acquisitions and changes in value relationships of the Euro and the Pound Sterling and the US Dollar.
Operating margins increased in the quarter and the six-month period from 17.6% to 18.8% and from 18.6% to 19.2% respectively. The gains resulted from continued cost control efforts, economies of scale with added revenues, all net of the effect of changes in gross margins. The company has had some increases in raw material costs and has been able to recover a portion though increases in sales prices. The Company continues to be committed to adjusting prices to protect margins.
Sales and Marketing expense as a percentage of revenues decreased in the second quarter from 20.1% to 19.3% and decreased on a year to date basis from 20.2% to 19.4%. The decrease in selling cost as a percent of revenue reflects the increased revenues without a commensurate increase in selling and distribution costs.
General and Administrative expense as a percentage of revenues declined in the second fiscal quarter from 10.5% to 9.7% and from 10.4% to 9.4% on a year-to-date basis. Changes in administrative expense as a percentage of revenue represent the effect of increased revenues without a commensurate increase in expenses.
Read the The complete ReportMore on NEOG:
Gurus buys and sells of NEOG
10-year financial history of NEOG.
Insider buys/sells of NEOG.
