) posted a 5.3% rise in adjusted earnings per share to 20 cents for
fiscal 2014-fourth-quarter (ended May 31, 2014) from the year-ago
level of 19 cents. However, adjusted earnings fell short of the
Zacks Consensus Estimate by a penny.
Net earnings in the fourth quarter increased 7.2% to $7.5
million from $7.0 million a year ago while revenues spiked 20.1%
year over year to $67.2 million.
Neogen Corporation - Quarterly EPS (BNRI) |
For fiscal 2014, Neogen reported adjusted earnings per share of
76 cents, up 1.3% from 75 cents in fiscal 2013 but down from the
Zacks Consensus Estimate of 77 cents. Net earnings for the fiscal
year rose 3.6% to $28.2 million from $27.2 million in fiscal
Revenues for the fiscal year stood at $247.4 million, up 19.2%
from $207.5 million in fiscal 2013.
business recorded a year-over-year growth of 4.4% in revenues to
$29.9 million in the fourth quarter. Revenues were boosted by
increased sales of multiple product lines in several market
segments, which more than offset lower sales of mycotoxin test
kits. Neogen's AccuPoint product line and increased sales of
instruments and disposables associated with Neogen's Soleris test
system also drove the revenue growth.
Revenues from the
segment soared 36.5% to $37.4 million. The upside was significantly
driven by the successful integration of recent acquisitions by
Neogen - Chem-Tech agricultural insecticides in Jan 2014, Prima
Tech veterinary instruments in Nov 2013, and SyrVet veterinary
instruments in Jul 2013. Strength in Neogen's line of proprietary
detectable veterinary needles, biologics and animal care products
considerably mitigated the decline in its line of small animal
Revenues from GeneSeek - Neogen's agrigenomic business - also
improved on increasing market acceptance of the product line and
the development of new genomic products.
Revenues from Neogen's Scotland-based subsidiary increased 24%
in fiscal 2014, with higher sales of food allergen test kits, lab
services, and several other key products. Further, Neogen achieved
a 39% increase in sales of food and animal safety products at its
Brazilian subsidiary, while its Mexican subsidiary posted an 18%
increase for fiscal 2014.
Expenses and Margins
Neogen's gross profit grew 12.9% to $32.0 million in the
reported quarter. However, gross margin contracted 310 basis points
(bps) to 47.6% in the fourth quarter of fiscal 2014 from 50.7% in
the comparable year-ago period. The decline was mainly due to the
shift in overall revenue toward animal safety products, along with
product mix shifts within each segment.
Sales and marketing expenses increased 22.2% to $12.9 million on
the back of higher personnel related costs, elevated marketing and
advertising activities, and increased shipping costs owing to
General and administrative expenses rose 10.7% to $6.3 million,
reflecting higher salary and fringe costs for increased personnel,
spiraling amortization expenses associated with recent
acquisitions, stock option expenses and legal fees.
Meanwhile, research and development expenses declined 2.7% to
$1.8 million. Despite an increase in operational expenses,
operating earnings rose 7.4% to $11.0 million but operating margin
contracted 200 bps to 16.3% from the year-ago level of 18.3%.
As of May 31, 2014, Neogen's cash and cash investments totaled
$76.5 million, lower than $85.4 million as of May 31, 2013. The
company had no long-term debt at the end of the year.
Currently, Neogen carries a Zacks Rack #3 (Hold). Better-ranked
stocks in the medical products industry include
Wright Medical Group Inc.
). While Hospira and Wright Medical Group sport a Zacks Rank #1
(Strong Buy), Alere carries a Zacks Rank #2 (Buy).
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