Neogen reports record revenues and earnings

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

LANSING, Mich., July 24, 2002 - Neogen Corporation (Nasdaq: NEOG) today announced that record quarterly revenues in its fourth quarter led the Company to an annual revenue increase of 18%, and net income of $0.62 per share for its 2002 fiscal year, which ended May 31.

FY 2002 revenues were $41,097,000, compared to revenues of $34,895,000 in Neogen's previous fiscal year. Neogen's net income increased to $0.62 per share in FY 2002, compared to $0.54 per share in the prior year. Neogen continued its rapid escalation in operating income, increasing 29% in FY 2002 to $5,500,000, compared to FY 2001's $4,265,000.

Neogen reported fourth quarter revenues of $11,011,000-a record quarter for the 20-year-old company-and net income per share of $0.17 for the three-month period. In the prior year Neogen reported fourth quarter revenues of $9,161,000 and net income of $0.15 per share.

"We are extremely pleased to report yet another solid year of revenue and earnings growth," said James Herbert, Neogen's president. "This marks the 12th consecutive year our revenues have topped the prior year. Compound annual growth for Neogen has been 22% for the past five years. Our last quarter marks the 38th consecutive profitable quarter from operations. With the largest and most experienced sales organization in our industry, and a continual flow of new products from R&D, we are very optimistic we will continue to set new records."

"Our increased notice in the financial press and the four financial research analysts now covering our stock will help with visibility in the market," said Richard Current, Neogen's chief financial officer. "That increased visibility and our track record should make Neogen even more of a compelling opportunity for investors."

During FY 2002, Neogen earned its second consecutive inclusion on Forbes Magazine's annual list of the 200 Best Small Companies in America, and was named to Fortune Small Business' list of the 100 fastest-growing, publicly-held small businesses in America, and to Bloomberg Personal Finance's Bloomberg 100, an annual listing of top performing stocks.

Neogen's Food Safety Division led the Company's revenue increase, with sales up 21% from FY 2001 to FY 2002. Sales of Neogen's line of foodborne pathogen tests, including tests for E. coli O157:H7, Salmonella and Listeria, grew 40%, and tests that detect food allergens, including peanuts, eggs and milk, increased 59%.

We are very pleased with our success in improving operating margins and consistent sales growth," said Lon Bohannon, Neogen's chief operating officer. "In the past two years, revenues are up 75%, and income from operations has jumped 132%. This dramatic increase in income from operations is a tribute to all Neogen employees who are motivated to grow sales by providing quality solutions for food and animal safety."

Neogen's Animal Safety Division's sales increased 15% in FY 2002, adding to the 53% gain from FY 2000 to FY 2001. Animal Safety's increase was led by a 34% jump in sales of Triple Crown veterinary pharmaceuticals, and a 73% increase in Ideal veterinary instruments. Ideal's large jump was partially due to Neogen's agreement with Tractor Supply Company to become the farm and ranch retail giant's primary supplier of veterinary instruments and supplies.

In April, Neogen announced the opening of a sales and distribution center in Shanghai, China. The expansion allows the Company to better serve the expanding food safety market, and to more closely oversee its current Chinese animal safety operations.

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)
  Year ended
2002
May 31
2001
Quarter Ended
2002
May 31
2001
Revenue $41,097 $34,895 $11,011 $9,161
Operating Income 5,500 4,265 1,464 1,366
Net Income 3,945 3,170 1,112 924
Net Income Per Share $0.62 $0.54 $0.17 $0.15
NEOGEN CORPORATION SUMMARIZED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
  May 31
2002
May 31
2001
Assets
Current Assets $23,249 $21,579
Property and Equipment 3,741 2,721
Goodwill and Other Assets 12,914 8,722
Total Assets $39,904 $33,022
 
Liabilities & Stockholders' Equity
Current Liabilities $3,964 $3,335
Long-term Liabilities 394 350
Equity 35,546 29,337
Total $39,904 $33,022

 

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.