Neogen reports strong Q2 results
The company said that revenue growth for the second quarter had been broad-based across a number of market segments in many product lines.
For the quarter ending 30 November 2010, the company reported a profit of $6.1m up $4.6m from the previous year.
The producer of food-testing kits and veterinary products reported second quarter revenue increase up 25 per cent to $43.9m compared to $35.2m compared to the same period last year.
According to the CEO James Herbert, the growth was a combination of a continual flow of new products from R&D and immediately accretive acquired product lines.
“The quarter showed indications that some customers are now more willing to make capital expenditures that had earlier been delayed,” said Herbert.
Lon Bohannon, company president said in a conference call that the company’s acquisitions had made a significant contribution to overall sales growth this fiscal year and that organic growth had also been very strong.
Bohannon said that international sales came from numerous sources, with Neogen's subsidiary operations in certain key countries continuing to be very promising.
Neogen Europe showed a 41 per cent increase in revenue compared to the prior year, “even after an adverse currency translation.”
This growth includes a “sharp” increase in sales of Acumedia dehydrated culture media and food safety diagnostics.
Food safety division
“Our Food Safety Division experienced a strong second quarter with overall growth of 16 per cent,” said Bohannon.
The company’s revenues rose in this division to $21.3m in FY 2011 from $18.4m in FY 2010. Year-to-date, the Food Safety Division’s revenues were up 21 per cent to $43.5 for FY 2011.
Bohannon that thisdivision achieved solid growth in almost all market segments, including grocery products, meat and poultry, nutraceutical market and pet food.
Food Safety product lines that achieved strong growth in the quarter included the company's line of tests for dairy antibiotics, which were up 9 per cent, and Neogen's line of dehydrated culture media which was up 20 per cent compared to the prior year.
One exception to Food Safety's quarter-to-quarter growth performance came in the area of sales to the milling and grain market, said Bohannon, where sales for this market segment declined in the second quarter compared to the previous year.
Bohannon said this was due to last year's corn harvest experienced widespread mold contamination, resulting in an unusually high volume of testing for the mycotoxin, DON.
“That mold growth was not repeated in this year's corn harvest to the same extent. And lower levels of DON testing relative to last year's will continue in the milling and grain segment for the rest of this fiscal year,” he said.
