Neogen Corp.’s net income for the second quarter of its 2016 fiscal year, which ended Nov. 30, increased 16 percent to $9.07 million or $0.24 per fully diluted share, from $7.81 million, $0.21 per share, in fiscal 2015. Current year-to-date net income was $18.4 million or $0.49 per share, compared with $16.7 million, or $0.45 per share, for the same period a year ago.
Revenues for the second quarter of fiscal 2016 increased 16 percent to $79.6 million, from the previous year’s second quarter revenues of $68.5 million. This increase was aided in part by recent acquisitions completed by the company. The quarterly revenue and net income results represent second quarter records for the 33-year-old company. Year to date, FY 2016 revenues increased 14 percent to $154.5 million from FY 2015’s $136.1 million.
“We are pleased to report that broad-based increases in the second quarter, throughout Neogen’s varied market segments, led us to reach our often stated goal of producing double-digit organic growth for the quarter,” said James Herbert, Neogen’s CEO and chairman. “We recorded these organic increases in revenues in many of our product lines, including animal genomics, pharmaceuticals, biosecurity products, and food safety diagnostics. The second quarter was yet another quarter when Neogen delivered results by both creating and capturing opportunities within its food and animal safety market segments.”
The second quarter was the 95th of the past 100 quarters that Neogen reported revenue increases as compared with the previous year — including all consecutive quarters in the last 10 years.
“The recent publication of three additional rules for the Food Safety Modernization Act, or FSMA, and numerous well-publicized food recalls, have helped to create an environment where food companies are scrutinizing their existing food safety plans,” said Richard Calk, Neogen’s president and chief operating officer. “Neogen is well positioned with a comprehensive line of products, including tests for pathogens, allergens, general sanitation and more, that are market leaders in helping food companies ensure the safety of their products.”
Expressed as a percentage of sales, operating income was 18.4 percent for the quarter, compared to 18.8 percent recorded in the company’s second quarter of its 2015 fiscal year. Neogen’s gross margin was 48 percent of sales in its second quarter of the current year, compared to the 50 percent recorded in the same quarter of the previous fiscal year. The change in gross margin was primarily due to product mix, acquisitions, and adverse currency translations.