Acquisitions Help Neogen Second-Quarter Profit Climb

Lansing, Mich. -- Neogen (NEOG Quote), which makes test kits for food and animal safety, said Tuesday that its second-quarter profit climbed 20%, helped by acquisitions.

The results marked the company's 63rd-consecutive profitable quarter.

Earnings rose to $3.9 million, or 26 cents per share, from $3.3 million, or 22 cents per share, a year ago.

For the period ended Nov. 30, revenue grew 15% to $31.2 million from $27.2 million. Food safety revenue improved to $15.4 million from $14.5 million, while animal safety revenue increased to $15.8 million from $12.7 million.

Analysts surveyed by Thomson Reuters predicted profit of 25 cents per share on sales of $32.3 million.

The company's animal safety unit reported sales rose 24% to $15.8 million, aided by the July 2008 acquisition of some agricultural and veterinary disinfectants from DuPont Animal Health Solutions. Sales of Kane products, acquired in August 2007, also continued to climb. The products include veterinary obstetrical gloves, bovine hoofcare, and surgical supplies.

Veterinary biologics revenue surged more than 60% on suspected equine botulism outbreaks in the U.S. Neogen is the exclusive provider of the most prevalent kind of equine botulism vaccine.

Revenue for the food safety unit, which was solely same-store sales, rose 6% to $15.4 million.

Same-store sales, or sales at stores open at least a year, is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

Acquisitions boosted operating income by 22% to $5.9 million.

Shares of the company added 22 cents to $26.22 in morning trading.