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FOR IMMEDIATE RELEASE
|CONTACT:||Steve Quinlan, Vice President & CFO|
|Neogen Corporation, 517/372-9200|
Neogen reports fiscal 2020 results
LANSING, Mich., July 21, 2020 Neogen Corporation (NASDAQ: NEOG) announced today that revenues for the fourth quarter of its 2020 fiscal year, which ended May 31, were $109,074,000, compared to $109,762,000 the prior year quarter. Revenues for the company for the full fiscal year were $418,170,000, compared to the prior years $414,186,000.
Fourth quarter net income was $16,347,000, or $0.31 per share, compared to the prior years $15,815,000, or $0.30 per share. Net income for the full 2020 fiscal year was $59,475,000, or $1.13 per share, compared to the prior years $60,176,000, or $1.15 per share.
Weve experienced unprecedented challenges to our business around the world in recent months. In response to this crisis, Neogen took immediate action to protect our employees and our business. The results that we are reporting today are reflective of an incredible amount of hard work from our entire team, and I am extremely proud of them, said John Adent, Neogens president and chief executive officer. While we know that we have a long, hard fight ahead of us, going forward, Neogens mission matters more than ever. Keeping our food, and food production environments, as safe as possible will be even more important in the challenging months that lie ahead. Neogen was built to do just that.
Gross margins for the company were 47.4% of sales in the fourth quarter of 2020, compared to 46.0% in the prior year quarter. The improvement was driven by opportunistic sales of sanitizers and disinfectants in response to COVID-19 and continued strength in genomic service revenues, in particular to the companion animal market. For the entire 2020 fiscal year, gross margins were 46.9%, compared to the prior years 46.3%, with increased margins in the Animal Safety segment resulting from higher margin genomic services and the strong sales of COVID-related disinfectants and sanitizers, partially offset by adverse impact of currency translations and lower sales of higher margin Food Safety products. Operating income improved to $19,944,000 in the current quarter, or 18.3% of sales, compared to $18,730,000, or 17.1%, in the fourth quarter of the companys 2019 fiscal year. For the entire year, operating income was $67.5 million, or 16.1% of sales, compared to $68.1 million, or 16.4%, in the companys 2019 fiscal year.
Currency headwinds, which had been fairly moderate in the first three quarters of the year, became much more significant in our fourth quarter as financial markets around the world absorbed the impact of COVID-19. In a neutral currency environment, revenues would have been $3.5 million higher for the quarter, primarily due to weakness in the Brazilian real and the Mexican peso, which were 25% and 18% lower, respectively, than in the fourth quarter a year ago, said Steve Quinlan, Neogens chief financial officer. Despite the currency issue, cost control programs and improved gross margins helped us achieve a $1.2 million increase in our operating income for the fourth quarter.
Revenues for the companys Food Safety segment were $54.3 million in the fourth quarter of fiscal 2020, compared to $56.4 million in last years fourth quarter. The segments fourth quarter performance was significantly affected by the currency impacts of the stronger dollar, a slowdown in the global restaurant and food service industries, and disruption of the global food supply, as specialized food production companies struggled to adapt to the abrupt change in consumer needs. For the year, revenues of $212.7 million in this segment decreased slightly compared to last year. This result was primarily due to a 30% decrease of drug residue kit sales, as Neogen ended an exclusive relationship with a European distributor in January; a decline of $2.8 million in forensic kit sales in Brazil (due to business lost in the fiscal years first quarter); currency headwinds; and an adverse COVID-19 impact across multiple product lines. Sales of Neogens rapid diagnostic tests to detect natural toxins increased 4% in fiscal 2020; our food allergen product line also grew 4% for the year.
The following information was filed by Neogen Corp (NEOG) on Tuesday, July 21, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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