Neogen reports 25% increase in net income

CONTACT: Richard R. Current, Vice President & CFO, 517/372-9200

LANSING, Mich., Sept. 25, 2002 - Neogen Corporation (Nasdaq: NEOG) announced today that net income for the first quarter of its 2003 fiscal year, which ended Aug. 31, was 25% higher than the previous fiscal year's first quarter. On a per share basis, Neogen's net income increased to $0.17, as compared to $0.14 per share a year earlier.

Neogen reported first quarter revenues of $10,897,000, a 12% increase compared to $9,732,000 in the first three months of fiscal year 2002. The Company's first quarter operating income was $1,539,000, up from $1,235,000 in the comparable prior year quarter. Neogen's strong growth in profit was driven in part by an increase in gross margins, to 53.4% of sales in FY 2003, from 50.3% in FY 2002.

"Our first quarter again demonstrated our consistent delivery of the exceptional performance investors have come to expect from us," said James Herbert, Neogen's president. "Our solid first quarter results are further evidence of the operational strength throughout Neogen. We are extremely proud of our record of 37 straight profitable quarters from operations."

Neogen's quarterly revenue performance was led by its Food Safety Division, which posted an 18% increase over year ago sales figures. The growth was paced by a 46% improvement in the sales of test kits to detect allergenic residues in food, and 25% quarter-to-quarter increase in sales of test kits to detect harmful bacteria in food, such as E. coli O157:H7, Salmonella and Listeria. The division's Acumedia dehydrated culture media also had a strong quarter, posting a 25% increase in sales compared to the prior year's first quarter.

Neogen's Animal Safety Division revenues increased 6% on a quarter-to-quarter comparison. Increases were led by a nearly 100% increase in sales of EqStim® Immunostimulant. EqStim is being used by veterinarians to boost the immune response of horses infected with the mosquito-borne West Nile virus.

"At $0.17 per share this was an excellent quarter that we think is the start of another outstanding year," said Richard Current, Neogen's chief financial officer. "We have again reported results that met analysts' expectations."

"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, drug residues, plant diseases and sanitation concerns. Neogen's Animal Safety Division markets a complete line of diagnostics, veterinary instruments, veterinary pharmaceuticals and nutritional supplements.

NEOGEN CORPORATION UNAUDITED SUMMARIZED CONSOLIDATED OPERATING DATA
(In thousands, except for per share and percentages)
  Quarter ended
2002
Aug. 31
2001
Revenue $10,897 $9,732
Operating Income 5,817 4,892
Net Income 1,539 1,235
Net Income Per Share $0.17 $0.14
NEOGEN CORPORATION SUMMARIZED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
  Aug. 31
2002
May 31
2002
Assets
Current Assets $23,215 $23,249
Property and Equipment 4,172 3,741
Goodwill 11,260 11,214
Other Assets 2,417 1,700
Total Assets $41,064 $39,904
 
Liabilities & Stockholders' Equity
Current Liabilities $4,004 $3,964
Long-term Liabilities 394 394
Equity 36,666 35,546
Total $41,064 $33,904

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.