Third quarter net income down
Neogen Corp. said its revenues for the third quarter of its 2020 fiscal year, which ended February 29, were $99.9 million, up 2% from the previous year’s third quarter revenues of $97.7 million. Year-to-date revenues were $310 million, also up 2% compared with $304.4 million for the same period a year ago.
Third quarter net income was $12.2 million, compared with the prior year’s $13.1 million. Earnings per share in the current quarter were $0.23, compared with $0.25 a year ago. Year-to-date net income was $43.1 million, or $0.82 per share, compared with $44.4 million, or $0.85 per share, for the same period a year ago.
“Given the dramatic world events of the last few months, I am extremely proud of our Neogen employees who are working tirelessly to supply the worldwide demand for our products. Our mission matters more today than ever; we are strategically important to the world’s ability to contain and recover from the global threat posed by COVID-19, and ensuring the safety, quality and quantity of the global food supply,” said John Adent, Neogen’s president and CEO. “While operating results overall were disappointing for the quarter, we were encouraged by continued strong performance in our genomics services and growth in a number of our food safety product lines. Additionally, in the third quarter we made four strategic acquisitions to enhance our global footprint.”
Steve Quinlan, Neogen’s chief financial officer, said the company is prepared for the volatile economic conditions it expects for the remainder of 2020.
“The strength of our balance sheet, with no debt, substantial cash reserves and solid cash generation, leaves us well prepared to weather the current adverse economic conditions that threaten the global economy in 2020 as a result of COVID-19,” he said. “We are proactively addressing issues associated with the current environment, including strengthening our global supply chain to secure availability of the raw materials we need for production. We are also focused on maintaining adequate staffing for our worldwide manufacturing operations to ensure we are able to continue to serve our global customer base.”
Neogen’s European operations revenues rose 5%, aided by growth in disinfectants to fight the spread of COVID-19 and African swine fever, higher sales of food allergen tests, and equipment sales. Neogen Latinoamerica’s revenues increased 15%, on strength across their diagnostics product portfolio and a large rodenticide order in Mexico. China’s revenues for the current quarter increased 38%, largely the result of increased sales of Neogen’s disinfectant products to combat the spread of COVID-19 in the country. Revenues from the company’s Brazilian operations decreased 16%, as revenues continue to be adversely impacted by the loss of sales of forensic test kits formerly used to test the nation’s truck drivers; as discussed previously, this business was lost in the first quarter of the current fiscal year.
Neogen’s Animal Safety segment reported a 6% revenue increase for the third quarter, largely on the strength of the domestic genomics business, with additional incremental volume of rodenticides, insecticides, and certain cleaners and disinfectants.
Neogen’s worldwide animal genomics business recorded an increase of 8% in the third quarter of fiscal 2020 compared to the prior year. This broad-based increase included strength in the domestic companion animal market, and genomic testing of beef and dairy cattle, swine and poultry around the world.