Neogen Corp (NEOG), a developer and marketer of food and animal safety products, has recorded a 15.75 percent increase in profit for the quarter ended Aug. 31, 2014. The company earned $8.91 million or $0.24 a share in the first-quarter compared with $7.70 million or $0.21 a share a year ago. Analysts on average had predicted net income of $0.23 a share. Revenue during the first-quarter grew 15.46 percent to $67.60 million from $58.55 million in the last year period.
Gross margin contracted by 145 basis points over the previous year period to 50.41 percent. Total expenses as a percentage of revenues increased to 80.12 percent from 78.79 percent in the same period last year. That has resulted in contraction of 133 basis points in operating margins to 19.88 percent. The company disclosed operating income of $13.44 million, compared with $12.42 million in the last year period.
''The first quarter was a solid start to our 2015 fiscal year, and again shows that enhancing the safety, quality and quantity of the global food supply is a sustainable strategy,'' said James Herbert, Neogen's chief executive officer and chairman. ''We are very pleased to report these results, especially our net income performance, as we faced a difficult comparison with an especially strong first quarter of the previous fiscal year. Our first quarter results and strong balance sheet provide a solid foundation from which to continue our growth momentum in the coming year.''
Working Capital
Neogen Corp has witnessed an increase in the working capital over the last one year. The company's working capital stood at $176.69 million as at Aug. 31, 2014, up $21.63 million or 13.95 percent from $155.07 million on Aug. 31, 2013. It registered an increase in current ratio to 8.22 as at Aug. 31, 2014 from 7.79 on Aug. 31, 2013.
Days' sales outstanding moved down to 62 days for first quarter compared with 65 days for the last year period. This indicates the company has shortened credit period to clients for making payment.
The company's days' inventory outstanding decreased to 76 days for first quarter compared with 134 days for the last year period. This suggests the company took less time to convert the inventory into sales.
The company's days' payable outstanding went down to 13 days for first quarter from 34 days for the last year period. This reflects that the company has made early payment to vendors compared to prior year period.
Shares of the company declined $0.41 or 0.99 percent to settle at $40.84 on Friday.