Knobias Clip Report (09-24-2008) NEOG
Submitted By Knobias ClipReport
NEOG: Management Discusses Record Q1 Results
By Fain Hughes, fhughes@knobias.com
Neogen Corporation (NEOG) reported its financial results today for the first quarter ended August 31, 2008. Revenues increased 26% from the previous year’s first quarter to $28,805,000. First quarter net income increased 24% from the prior year’s $3,011,000 to $3,733,000, or to $0.25 per share in the current year compared to the previous year’s $0.21. This beat the consensus estimate from analysts of $0.24.
The first quarter revenues, net income, and earnings per share all represent quarterly records for the 26-year-old company. The quarter also marked the 62nd consecutive profitable quarter from operations for the company, and was the 66th of the past 71 quarters when Neogen reported revenue increases as compared with the previous year.
James L. Herbert, Chairman and CEO of Neogen, commented in a conference call today, “These results demonstrate our ability to deliver solid consistent performance.”
Lon M. Bohannon, President and COO of Neogen, added, “While successful integration of acquisitions contributed to the top and bottom line growth in the quarter, we experienced another outstanding quarter for organic sales growth. International sales were approximately 42% of total revenues, and that is another record for the Company. Gross margins were a solid 51.4%. This was lower than last year due to the product mix. Total revenues in Q1 has a lower overall mix of diagnostic test kit products which have higher gross margins that many of our other products.”
He added, “We believe that the best way to evaluate our overall performance is to look at the operating profit line which was 19.6% of sales. This is 200 basis points higher than we achieved in FY08. We are fortunate to be selling products into markets that are growing. We are excited about the prospects in 2009 as we move toward our longer term opportunities to build Neogen into a $200 million company.”
Mr. Herbert concluded, “Over the past several days, we have seen high volume trading in our stock and multi-year highs in our stock price, while most stocks declined. I believe we are perceived as a safe place for investments and an investment opportunity with good potential growth.”
“Our financial stability gives us the opportunity to make wise investments. Over the past two months, we have stepped up our R&D activities with the construction of new laboratories and notable increases in our scientific staff. This will provide more opportunities than ever before for new products. Our business is somewhat immune against the economic ills that affect other industries. Even in tough times, the food industry can’t back down from its goal of providing safe food. Also, though household budgets are squeezed, consumers will not back down from demanding safe and wholesome food.”
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