Earnings Review and Free Research Report: Neogen Posted Record Revenue and Earnings for the Quarter and Fiscal Year

LONDON, UK / ACCESSWIRE / July 20, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Neogen Corp. (NASDAQ: NEOG), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=NEOG, following the Company’s reporting of its financial results on July 18, 2017, for the fourth quarter and fiscal 2017. The maker of medical testing kits met earnings expectations and reported y-o-y growth for the 48th consecutive quarter. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Earnings Reviewed

Neogen’s revenues for the fourth quarter of fiscal 2017 which ended May 31, 2017, were $98.85 million, reflecting an increase of 10% compared to revenue of $90.08 million in Q4 FY16. The Company’s revenue number missed analysts’ expectations of $100.80 million. The reported quarter was the 101st of the past 106 quarters that Neogen reported revenue growth on a y-o-y basis, including all consecutive quarters in the past 12 years. Neogen’s revenues for FY17 gained 13% to $361.59 million compared to $321.28 million in FY16.

Neogen’s gross margins were 47.6% in both FY17 and FY16. The Company’s operating expenses overall rose 7% for the reported quarter and 11% for the fiscal year. Neogen’s research and development expenses were up 5% for FY17 as the Company continues to invest in its product development programs in both new products and enhancements to existing products, primarily in the Food Safety segment. Neogen’s operating income for Q4 FY17 was $19 million or 19.2% of sales, an increase of 22% compared to the $15.6 million, or 17.3% of sales, recorded in Q4 FY16. The Company’s operating income was $64.9 million, or 18.0% of sales, in the current fiscal year compared to $56.4 million, or 17.6% of sales, in last year’s same period.

Neogen announced net income for Q4 FY17 was $12.47 million, or $0.32 per fully diluted share, reflecting an increase of 27% from net income of $9.86 million, or $0.26 per share, in Q4 FY16. The Company’s earnings numbers met Wall Street’s expectations of $0.32 per share.

Neogen’s net income for FY17 grew 20% to $43.79 million, or $1.14 per share, compared to the prior year’s $36.56 million, or $0.97 per share. Revenues and net income for the reported 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.”

Segment Results

During Q4 FY17, revenues for Neogen’s Food Safety segment grew to $48.26 million compared to revenue of $39.72 million for Q4 FY16. The Company’s revenue gained 17% on a y-o-y basis to $171.33 million for the current fiscal year. Organic growth for the Food Safety segment was 9% for FY17, excluding the adverse currency effect, the increase was 14%.

Neogen’s Food Safety segment’s sales performance for FY17 was led by a 19% increase in sales of Neogen’s rapid tests for natural toxins. Sales of the Company’s test kits to detect food allergens, such as gluten, milk, and peanuts, increased 16% in the current fiscal year. This increase was aided by increasing global food allergen regulatory efforts and strong sales of Neogen’s product to simultaneously detect six tree nuts with one test.

For Q4 FY17, Neogen’s Animal Safety segment’s revenue grew marginally to $50.59 million compared to $50.36 million in Q4 FY16. In the reported fiscal year, the Company reported a 9% growth to $190.27 million driven by the May 2016 acquisition of Preserve International’s cleaner and disinfectant business. Neogen’s sales of rapid tests to detect drug residues in forensic samples rose 34% compared to the prior year, due to a significant increase in sales of drug detection kits to commercial labs. The Animal Safety segment also recorded an 11% increase in sales of its patented D3™ Detectable Needles, which are engineered to be more resistant to breakage and detectable in standard metal detectors.

Balance Sheet

Neogen generated $15.5 million in cash from operations during Q4 FY17 and $60.7 million for FY 2017. The Company stated that inventory balances increased 14% in FY17, largely due to continuing efforts to build up key inventories globally to minimize back orders and improve service levels.

Stock Performance

On Wednesday, July 19, 2017, the stock closed the trading session at $66.89, climbing 3.54% from its previous closing price of $64.60. A total volume of 106.83 thousand shares has exchanged hands, which was higher than the 3-month average volume of 101.71 thousand shares. Neogen’s stock price advanced 9.15% in the last three months, 1.84% in the past six months and 19.00% in the previous twelve months. Additionally, the Company’s shares gained 1.35% since the start of the year. The stock is trading at a PE ratio of 61.94. At Wednesday’s closing price, the stock’s net capitalization stands at $2.54 billion.

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