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Neogen Reports Second Quarter Results
Date:12/22/2011

both food and animal safety products from its Mexican and Brazilian subsidiaries.

Gross margins were 50.5% in the second quarter of FY 2012 compared to 51.2% in the same period a year ago, and were 50.4% for the year-to-date, from 52.1% for the same period a year ago. The change in gross margins for both periods was due to changes in product mix and increases in manufacturing expenses. Operating expenses increased by $1,655,000, or 12.9%, in the second quarter of FY 2012 compared to FY 2011, due primarily to an increase of $1,127,000 in sales and marketing expenses. Neogen previously announced an investment in sales and marketing personnel in order to increase future organic sales growth. On a year-to-date basis, operating expenses were 8.1% over the same period from last year, principally for the same reason.

Neogen's recently released fully quantitative testing methodology for natural toxins is beginning to build sales momentum. The first test launched in the line, Reveal® Q+ for Aflatoxin, is a fully quantitative lateral flow screening test. Aflatoxin is a by-product of mold growth in a wide range of commodities, including corn, and is considered by many to be the most potent, naturally-occurring carcinogen. Because it is a known severe threat to human and animal health, more than 100 countries have established regulatory limits for aflatoxin in commodities intended as human food or animal feed. Follow-up tests in the new testing methodology for two other important natural toxins, deoxynivalenol (DON) and zearalenone, will be launched in Neogen's third quarter.

Neogen also recently launched an even faster method to rapidly and accurately detect yeast and mold in food products. Neogen's new Soleris test detects yeast and mold in 48 hours or less — conventional methods take up to 5 days. Tests for yeast and mold comprise approximately 15% of all microbiological tests performed worldwide.

In the third quarter, Neogen
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SOURCE Neogen Corporation
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