Neogen, a leading company in food-safety and animal-safety products, saw a rise in revenue but a decrease in profit during its fiscal first quarter. This drop in profit is attributed to the ongoing impact of Neogen's acquisition of 3M's former food-safety division a year ago.
In the quarter ended Aug. 31, Neogen recorded a profit of $1.5 million, or one cent a share. This is a decline from the $5.2 million, or five cents a share, reported in the same quarter of the previous year. However, when excluding one-time items, the adjusted earnings were 11 cents a share.
Despite the decrease in profit, Neogen experienced a significant increase in revenue, which reached $229 million. This represents a growth of 73%. Analysts anticipated revenue to reach $231.1 million, according to FactSet.
Factors Contributing to Growth
Neogen attributes the entire revenue growth to various factors such as acquisitions, product line discontinuations, and foreign currency translation effects in the past 12 months. However, if we exclude these factors, revenue actually decreased by 1.3%.
Reason for Decreased Profit
The drop in net income compared to the previous year is primarily due to higher interest expenses and the amortization of acquisition-related intangibles. These expenses are associated with the merger of 3M's food-safety division, which was completed on Sept. 1.
In conclusion, Neogen's first quarter financial results reflect an increase in revenue but a smaller profit. The company continues to deal with the impact of its acquisition of 3M's former food-safety division. Despite this, Neogen remains a key player in the food-safety and animal-safety products industry.