|CONTACT: Richard R Current, Vice President & CFO, 517/372-9200|
LANSING, Mich., Oct. 13, 2004 — Neogen Corporation (Nasdaq: NEOG) announced today that it has acquired the food safety distribution business of BiologischeAnalysensysteme GmbH (BAG), a company based in Lich, Germany. Besides its other activities, BAG has been a distributor of Neogen food safety products in Germany.
BAG’s revenues for the past 12 months were approximately $600,000 (U.S.). Distribution of Neogen food safety products in Germany will now be managed from Neogen Europe Ltd. in Scotland. With the acquisition, key BAG employees will be joining Neogen, ensuring a smooth transition and continued strong revenue growth. In the future, BAG will focus on its clinical diagnostic, sterilization control and pharma business.
“Germany has traditionally been a strong market for our food safety products, and we believe it continues to hold good opportunities for sales growth,” said James Herbert, Neogen’s president. “Our March 2003 Scottish acquisition has allowed us better access to the European Union, and allows us to better serve our distributors and customers throughout the EU with easily accessible inventory and increased support. Adding BAG’s food safety distribution network in Germany to our Neogen Europe operations will further strengthen our presence in the EU.”
The acquisition is a result of Neogen’s continuing focus on growth through the expansion of sales into international markets. Industry experts estimate that the total international market for food safety products is at least twice the domestic market, and the EU is seen as a key component of the total international market.
In 2004, Neogen expanded its Neogen Europe Ltd. facilities in Ayr, Scotland, to better handle direct sales to England, Scotland, Ireland and France, and better support its network of distributors throughout the EU. German distribution will now be integrated. Neogen has eight independent distributors serving the remainder of Europe.
Neogen’s focus on international sales growth netted a significant improvement in its 2004 fiscal year (ended May 31), as international sales grew from 20% of total company revenues in FY 2003 to 25%. Neogen’s overall growth strategy continued to yield impressive results, as Neogen recently reported a 24% revenue increase to $15,212,000 for the first quarter of its 2005 fiscal year.
Neogen Corporation develops and markets products and services dedicated to food and animal safety. The company’s Food Safety Division markets dehydrated culture media, and diagnostic test kits to detect foodborne bacteria, natural toxins, genetic modifications, food allergens, unique proteins, drug residues, plant diseases and sanitation concerns. Neogen’s Animal Safety Division markets a complete line of diagnostics, veterinary instruments, veterinary pharmaceuticals, nutritional supplements, disinfectants, and rodenticides.
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.