Neogen Q3 2020 Earnings Report
Key Takeaways
Neogen Corporation reported a 2% increase in revenue for the third quarter of fiscal year 2020, reaching $99,869,000, while net income decreased to $12,200,000, with earnings per share at $0.23. The company highlighted strong performance in genomics services and certain food safety product lines, along with strategic acquisitions to expand its global footprint.
Revenues increased by 2% to $99,869,000 compared to the previous year's third quarter.
Net income decreased to $12,200,000 from $13,073,000 in the prior year.
Earnings per share were $0.23, down from $0.25 a year ago.
The company made four strategic acquisitions to enhance its global footprint.
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Forward Guidance
Neogen is proactively addressing issues associated with the current environment, including strengthening its global supply chain to secure availability of the raw materials and maintaining adequate staffing for its worldwide manufacturing operations to ensure it is able to continue to serve its global customer base.
Positive Outlook
- Strong balance sheet with no debt.
- Substantial cash reserves.
- Solid cash generation.
- Strengthening global supply chain.
- Maintaining adequate staffing for worldwide manufacturing operations.
Challenges Ahead
- Adverse economic conditions threaten the global economy in 2020 as a result of COVID-19.
- Revenues for the company’s Food Safety segment decreased 1% during the third quarter compared to the prior year quarter.
- Significant decrease in sales of drug residue test kits due to ending exclusive relationship with distributor in Europe.
- Loss of forensic kit sales in Brazil due to a customer switching to an alternative technology platform.
- Revenues from the company’s Brazilian operations decreased 16%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income