The second quarter was the 75th consecutive profitable quarter from operations for the company, and the 83rd quarter of the past 88 quarters that Neogen reported revenue increases as compared with the previous year – including the last 31 consecutive quarters.
Neogen’s gross margin increased to 53.8% of sales in its second quarter, compared to 50.5% of sales for FY 2012’s second quarter. This increase was largely the result of a shift in product mix toward diagnostic products in the food safety segment, which have higher margins. Additionally, margins within the animal safety segment improved due to a shift in product mix to higher margin products. Largely as a result of the increased gross margins, Neogen reported operating income, expressed as a percentage of sales, of 20.6% for the quarter, compared to 18.1% in the year ago quarter.
Sales of Neogen’s innovative rapid tests for food allergens continued their strong advance, improving approximately 16% in the current quarter compared to the prior year’s second quarter. This performance was in part the result of strong initial acceptance of the company’s new Reveal 3-D test kits. The new test format offers a rapid time to results, easy extraction, and a third test line to indicate when a very high level of target food allergen is present, instead of simply the presence or absence of that allergen.
Sales of Neogen’s rodenticides continued their strong rebound in FY 2013, increasing 23% from the prior year’s comparable quarter. In the quarter, rodenticide sales were especially strong in the farm retail and animal protein market segments. Sales of Neogen’s small animal supplements increased significantly in the current year quarter when compared to the prior year quarter, as the company responded to a temporary market shortage of supplements used as thyroid hormone replacement therapy in dogs.
Neogen Corporation develops and markets products dedicated to food and animal safety. The company’s Food Safety Division markets dehydrated culture media and diagnostic test kits to detect foodborne bacteria, natural toxins, food allergens, drug residues, plant diseases and sanitation concerns. Neogen’s Animal Safety Division is a leader in the development of animal genomics along with the manufacturing and distribution of a variety of animal healthcare products, including diagnostics, pharmaceuticals, veterinary instruments, wound care and disinfectants.
(In thousands, except for per share and percentages)
SOURCE Neogen Corporation