- Revenue of
$217.0 million . - Net loss of
$12.6 million ;$(0.06) per diluted share. - Adjusted Net Income of
$14.4 million ;$0.07 per diluted share. - Adjusted EBITDA of
$43.7 million . - Maintaining full-year guidance.
"During the first quarter, the focus of our teams shifted from managing through the initial complexity of exiting the transition service agreements from the 3M transaction to gaining market share," said
Adent continued, "The value proposition of Neogen's food safety solutions and expertise has never been more relevant than it is today. We provide an important and relatively inexpensive line of defense in the rapid detection of contaminants in the production and distribution of food and beverages. As evidenced by some unfortunate higher-profile incidents recently, contaminated products reaching consumers is something we all work to avoid. Beyond the obvious tragic consequences that can result, the costs of any associated recalls, litigation, brand damage or even facility closures can be tremendous. In addition to our broad portfolio of globally validated products, we have longstanding experience as a trusted partner that we're able to leverage in structuring robust food safety testing programs to help avoid these outcomes. Our commercial teams are having an increasing amount of constructive dialogue with customers on this front and we're looking forward to continuing to demonstrate our capabilities as a reliable, knowledgeable source of leading food safety testing solutions."
Financial and Business Highlights
Revenues for the first quarter were
Net loss for the first quarter was
Gross margin was 48.4% in the first quarter of fiscal 2025. This compares to a gross margin of 51.0% in the same quarter a year ago, with the decrease primarily due to lower volume and continued higher distribution costs. Adjusting for transaction- and integration-related costs, as well as discontinued product costs, gross margin was 50.7% in the first quarter compared to 51.6% in the prior-year quarter.
First-quarter Adjusted EBITDA was
Food Safety Segment
Revenues for the Food Safety segment were
Animal Safety Segment
Revenues for the Animal Safety segment were
On a global basis, the Company's Genomics business experienced a core revenue decline in the mid-single-digit range, reflecting modest sequential improvement from the fourth quarter. Increased sales in international beef and dairy markets were offset by the impact of customer attrition in the
Liquidity and Capital Resources
As of
Fiscal Year 2025 Outlook
The Company is maintaining its full-year outlook. Revenue is expected to be in the range of
Conference Call and Webcast
About Neogen
Neogen is committed to fueling a brighter future for global food security through the advancement of human and animal well-being. Harnessing the power of science and technology,
Certain portions of this news release that do not relate to historical financial information constitute forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties. Actual future results and trends may differ materially from historical results or those expected depending on a variety of factors listed in Management's Discussion and Analysis of Financial Condition and Results of Operations in the company's most recently filed Form 10-K.
NEOGEN CORPORATION |
|
|||||||
|
|
Three months ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Revenue |
|
|
|
|
|
|
||
Food Safety |
|
$ |
159,345 |
|
|
$ |
166,278 |
|
Animal Safety |
|
|
57,619 |
|
|
|
62,709 |
|
Total revenue |
|
|
216,964 |
|
|
|
228,987 |
|
Cost of revenues |
|
|
112,038 |
|
|
|
112,226 |
|
Gross profit |
|
|
104,926 |
|
|
|
116,761 |
|
Operating expenses |
|
|
|
|
|
|
||
Sales & marketing |
|
|
45,799 |
|
|
|
45,783 |
|
Administrative |
|
|
51,671 |
|
|
|
45,121 |
|
Research & development |
|
|
5,199 |
|
|
|
6,722 |
|
Total operating expenses |
|
|
102,669 |
|
|
|
97,626 |
|
Operating income |
|
|
2,257 |
|
|
|
19,135 |
|
Interest expense, net |
|
|
(17,622) |
|
|
|
(16,666) |
|
Other expense |
|
|
(244) |
|
|
|
(806) |
|
(Loss) income before tax |
|
|
(15,609) |
|
|
|
1,663 |
|
Income tax (benefit) expense |
|
|
(3,000) |
|
|
|
160 |
|
Net (loss) income |
|
$ |
(12,609) |
|
|
$ |
1,503 |
|
Net (loss) earnings per diluted share |
|
$ |
(0.06) |
|
|
$ |
0.01 |
|
Shares to calculate per share amount |
|
|
216,695,348 |
|
|
|
216,846,106 |
|
NEOGEN CORPORATION |
||||||||
|
|
|
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Current Assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
120,477 |
|
|
$ |
170,611 |
|
Marketable securities |
|
|
— |
|
|
|
325 |
|
Accounts receivable, net of allowance of |
|
|
167,639 |
|
|
|
173,005 |
|
Inventories, net of reserves of |
|
|
198,596 |
|
|
|
189,267 |
|
Prepaid expenses and other current assets |
|
|
53,938 |
|
|
|
56,025 |
|
Total Current Assets |
|
|
540,650 |
|
|
|
589,233 |
|
Net Property and Equipment |
|
|
300,971 |
|
|
|
277,104 |
|
Other Assets |
|
|
|
|
|
|
||
Right of use assets |
|
|
14,311 |
|
|
|
14,785 |
|
|
|
|
2,137,494 |
|
|
|
2,135,632 |
|
Intangible assets, net |
|
|
1,489,751 |
|
|
|
1,511,653 |
|
Other non-current assets |
|
|
19,996 |
|
|
|
20,426 |
|
Total Assets |
|
$ |
4,503,173 |
|
|
$ |
4,548,833 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
||
Current Liabilities |
|
|
|
|
|
|
||
Current portion of finance lease |
|
$ |
2,651 |
|
|
$ |
2,447 |
|
Accounts payable |
|
|
61,464 |
|
|
|
83,061 |
|
Accrued compensation |
|
|
15,803 |
|
|
|
19,949 |
|
Income tax payable |
|
|
11,102 |
|
|
|
10,449 |
|
Accrued interest |
|
|
3,554 |
|
|
|
10,985 |
|
Deferred revenue |
|
|
5,635 |
|
|
|
4,632 |
|
Other accruals |
|
|
22,480 |
|
|
|
22,800 |
|
Total Current Liabilities |
|
|
122,689 |
|
|
|
154,323 |
|
Deferred Income Tax Liability |
|
|
317,574 |
|
|
|
326,718 |
|
Non-current debt |
|
|
889,129 |
|
|
|
888,391 |
|
Other non-current liabilities |
|
|
38,589 |
|
|
|
35,259 |
|
Total Liabilities |
|
|
1,367,981 |
|
|
|
1,404,691 |
|
Commitments and Contingencies |
|
|
|
|
|
|
||
Equity |
|
|
|
|
|
|
||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
34,672 |
|
|
|
34,658 |
|
Additional paid-in capital |
|
|
2,588,930 |
|
|
|
2,583,885 |
|
Accumulated other comprehensive loss |
|
|
(31,421) |
|
|
|
(30,021) |
|
Retained earnings |
|
|
543,011 |
|
|
|
555,620 |
|
Total Stockholders' Equity |
|
|
3,135,192 |
|
|
|
3,144,142 |
|
Total Liabilities and Stockholders' Equity |
|
$ |
4,503,173 |
|
|
$ |
4,548,833 |
|
NEOGEN CORPORATION |
|
|||||||
|
|
Three months ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Cash Flows (used for) provided by Operating Activities |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
(12,609) |
|
|
$ |
1,503 |
|
Adjustments to reconcile net (loss) income to net cash from operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
29,800 |
|
|
|
28,734 |
|
Deferred income taxes |
|
|
(9,119) |
|
|
|
998 |
|
Share-based compensation |
|
|
3,982 |
|
|
|
2,638 |
|
Loss on disposal of property and equipment |
|
|
77 |
|
|
|
— |
|
Amortization of debt issuance costs |
|
|
860 |
|
|
|
860 |
|
Other |
|
|
(261) |
|
|
|
— |
|
Change in operating assets and liabilities, net of business acquisitions: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
4,796 |
|
|
|
16,242 |
|
Inventories, net |
|
|
(9,939) |
|
|
|
(6,304) |
|
Prepaid expenses and other current assets |
|
|
(1,733) |
|
|
|
(12,925) |
|
Accounts payable and accrued liabilities |
|
|
(15,881) |
|
|
|
4,980 |
|
Interest expense accrual |
|
|
(7,431) |
|
|
|
(7,711) |
|
Change in other non-current assets and non-current liabilities |
|
|
(456) |
|
|
|
(6,006) |
|
|
|
|
(17,914) |
|
|
|
23,009 |
|
Cash Flows used for Investing Activities |
|
|
|
|
|
|
||
Purchases of property, equipment and other non-current intangible assets |
|
|
(38,433) |
|
|
|
(30,630) |
|
Proceeds from the maturities of marketable securities |
|
|
325 |
|
|
|
21,905 |
|
Proceeds from the sale of property and equipment and other |
|
|
4,446 |
|
|
|
41 |
|
|
|
|
(33,662) |
|
|
|
(8,684) |
|
Cash Flows provided by Financing Activities |
|
|
|
|
|
|
||
Exercise of stock options and issuance of employee stock purchase plan shares |
|
|
1,077 |
|
|
|
1,062 |
|
Repayment of long-term debt and finance lease |
|
|
(98) |
|
|
|
— |
|
|
|
|
979 |
|
|
|
1,062 |
|
Effects of Foreign Exchange Rate on Cash |
|
|
463 |
|
|
|
205 |
|
Net (Decrease) Increase in Cash and Cash Equivalents |
|
|
(50,134) |
|
|
|
15,592 |
|
Cash and Cash Equivalents, Beginning of Year |
|
|
170,611 |
|
|
|
163,240 |
|
Cash and Cash Equivalents, End of Year |
|
$ |
120,477 |
|
|
$ |
178,832 |
|
Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures, which management believes are useful to investors, securities analysts and other interested parties. Management uses Adjusted EBITDA as a key profitability measure. This is a non-GAAP measure that represents EBITDA before certain items that impact comparison of the performance of our business, either period-over-period or with other businesses. Adjusted EBITDA Margin is Adjusted EBITDA for a particular period expressed as a percentage of revenues for that period.
Management uses Adjusted Net Income as an additional measure of profitability. Adjusted Net Income is a non-GAAP measure that represents net income before certain items that impact comparison of the performance of our business, either period-over-period or with other businesses.
Core revenue growth is a non-GAAP measure that represents net sales for the period excluding the effects of foreign currency translation rates and the first-year impacts of acquisitions and discontinued product lines, where applicable. Core revenue growth is presented to allow for a meaningful comparison of year-over-year performance without the volatility caused by foreign currency translation rates, or the incomparability that would be caused by the impact of an acquisition, disposal or product line discontinuation.
These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP. Please see below for a reconciliation of historical non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP.
NEOGEN CORPORATION |
||||||||
|
|
Three months ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Net (loss) income |
|
$ |
(12,609) |
|
|
$ |
1,503 |
|
Income tax (benefit) expense |
|
|
(3,000) |
|
|
|
160 |
|
Depreciation and amortization |
|
|
29,800 |
|
|
|
28,734 |
|
Interest expense, net |
|
|
17,622 |
|
|
|
16,666 |
|
EBITDA |
|
$ |
31,813 |
|
|
$ |
47,063 |
|
Share-based compensation |
|
|
3,982 |
|
|
|
2,638 |
|
FX transaction gain on loan and other revaluation (1) |
|
|
(320) |
|
|
|
(290) |
|
Certain transaction fees and integration costs (2) |
|
|
5,122 |
|
|
|
1,951 |
|
Severance and other employment costs |
|
|
370 |
|
|
|
559 |
|
Contingent consideration adjustments |
|
|
— |
|
|
|
300 |
|
ERP expense (3) |
|
|
1,835 |
|
|
|
128 |
|
Discontinued product line expense (4) |
|
|
912 |
|
|
|
20 |
|
Adjusted EBITDA |
|
$ |
43,714 |
|
|
$ |
52,369 |
|
Adjusted EBITDA margin (% of sales) |
|
|
20.1 |
% |
|
|
22.9 |
% |
|
(1) Net foreign currency transaction loss associated with the revaluation of foreign denominated intercompany loans |
(2) Includes costs associated with the 3M transaction, including various transition agreements. |
(3) Expenses related to ERP implementation. |
(4) Expenses associated with certain discontinued product lines. Amounts are recorded within Cost of Revenues. |
NEOGEN CORPORATION |
||||||||
|
|
Three months ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Net (loss) income |
|
$ |
(12,609) |
|
|
$ |
1,503 |
|
Amortization of acquisition-related intangibles |
|
|
23,138 |
|
|
|
23,325 |
|
Share-based compensation |
|
|
3,982 |
|
|
|
2,638 |
|
FX transaction gain on loan and other revaluation (1) |
|
|
(320) |
|
|
|
(290) |
|
Certain transaction fees and integration costs (2) |
|
|
5,122 |
|
|
|
1,951 |
|
Severance and other employment costs |
|
|
370 |
|
|
|
559 |
|
Contingent consideration adjustments |
|
|
— |
|
|
|
300 |
|
ERP expense (3) |
|
|
1,835 |
|
|
|
128 |
|
Discontinued product line expense (4) |
|
|
912 |
|
|
|
20 |
|
Estimated tax effect of above adjustments (5) |
|
|
(8,052) |
|
|
|
(6,447) |
|
Adjusted Net Income |
|
$ |
14,378 |
|
|
$ |
23,687 |
|
Adjusted Earnings per Share |
|
$ |
0.07 |
|
|
$ |
0.11 |
|
|
(1) Net foreign currency transaction loss associated with the revaluation of foreign denominated intercompany loans |
(2) Includes costs associated with the 3M transaction, including various transition agreements. |
(3) Expenses related to ERP implementation. |
(4) Expenses associated with certain discontinued product lines. Amounts are recorded within Cost of Revenues. |
(5) Tax effect of adjustments is calculated using projected effective tax rates for each applicable item. |
NEOGEN CORPORATION |
||||||||||||||||
|
|
Q1 FY25 |
|
|
Q1 FY24 |
|
|
Growth |
|
Foreign Currency |
|
Acquisitions / |
|
Core Revenue |
||
Food Safety |
|
$ |
159,345 |
|
|
$ |
166,278 |
|
|
(4.2 %) |
|
(5.4 %) |
|
0.1 % |
|
1.1 % |
Animal Safety |
|
|
57,619 |
|
|
|
62,709 |
|
|
(8.1 %) |
|
0.0 % |
|
(0.3 %) |
|
(7.8 %) |
Total Neogen |
|
$ |
216,964 |
|
|
$ |
228,987 |
|
|
(5.3 %) |
|
(3.9 %) |
|
0.0 % |
|
(1.4 %) |
Contact
Bill Waelke
(517) 372-9200
ir@neogen.com
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