Neogen Corporation (NEOG) reported third-quarter fiscal 2025 adjusted earnings per share (EPS) of 10 cents, which missed the Zacks Consensus Estimate by 23.1%. The bottom line fell 16.7% from the year-ago quarter’s figure.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Neogen’s Q3 RevenuesRevenues in the quarter decreased 3.4% on a year-over-year basis to $220.9 million. Core revenues increased 0.2%. Acquisitions and discontinued product lines had a negative impact of 0.5% while forei ...

Core Insights - Neogen (NEOG) reported a revenue of $220.98 million for the quarter ended February 2025, reflecting a year-over-year decline of 3.4% and an EPS of $0.10, down from $0.12 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $223.03 million by 0.92%, and the EPS was 23.08% below the consensus estimate of $0.13 [1] Revenue Breakdown - Animal Safety revenues totaled $68.25 million, slightly below the average estimate of $68.77 million, marking a 4% decline year-over-year [4] - Food Safety revenues were reported at $152.73 million, also below the average estimate of $154.26 million, representing a 3.2% decrease year-over-year [4] - Specific segments within Animal Safety showed varied performance, with Life Sciences revenues increasing by 9.6% to $1.50 million, while Veterinary Instruments & Disposables fell by 14.3% to $15.41 million [4] - In Food Safety, revenues from Natural Toxins & Allergens decreased by 10.9% to $17.60 million, while Rodent Control, Insect Control & Disinfectants increased by 16.6% to $11.82 million [4] - Genomics Services in Animal Safety significantly outperformed estimates, reporting $17.01 million against an average estimate of $6.43 million [4] - Conversely, Food Safety Genomics Services reported $5.70 million, falling short of the average estimate of $18.46 million [4] Stock Performance - Neogen's shares have declined by 28.8% over the past month, compared to a 13.5% decline in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Performance - Total revenues for the three months ended February 28, 2025, were $220.98 million, a decrease of 3.6% compared to $228.81 million for the same period in 2024[12]. - Product revenues decreased to $196.49 million for the three months ended February 28, 2025, down from $202.18 million in the prior year, representing a decline of 2.4%[12]. - Net loss for the three months ended February 28, 2025, was $10.96 million, compared to a net loss of $2.02 million for the same period in 2024, indicating a significant increase in losses[12]. - Gross profit for the three months ended February 28, 2025, was $110.27 million, down from $116.88 million in the same period last year, reflecting a decrease of 5.7%[12]. - Operating income for the three months ended February 28, 2025, was $5.42 million, a decrease of $6.61 million from $12.02 million in the same period of 2024[85]. - Adjusted EBITDA decreased by $4.2 million to $48.513 million for the three months ended February 28, 2025, with an Adjusted EBITDA margin of 22.0%, down from 23.0% in the prior year[120]. - For the nine months ended February 28, 2025, the net loss was $479.848 million, with a net loss margin of -71.7%, compared to a net loss of $4.006 million and a margin of -0.6% in 2024[119]. Revenue Segments - The Food Safety segment generated $152.73 million in revenue for the three months ended February 28, 2025, compared to $157.75 million in 2024, reflecting a decline of 3.2%[41]. - The Animal Safety segment reported revenues of $68.25 million for the three months ended February 28, 2025, down from $71.06 million in 2024, a decrease of 3.9%[41]. - The Food Safety segment's revenue decreased by $5.0 million (3%) for the three months and $12.1 million (2%) for the nine months ended February 28, 2025, primarily due to currency headwinds and discontinued product lines[101][102]. - The Animal Safety segment's revenue decreased by $2.8 million (4%) for the three months and $6.1 million (3%) for the nine months ended February 28, 2025, attributed to decreased sales of veterinary instruments and lower genomics volume[103][104]. Expenses and Impairments - Operating expenses for the three months ended February 28, 2025, totaled $104.85 million, remaining relatively stable compared to $104.86 million in the prior year[12]. - The company reported a goodwill impairment of $461.39 million for the nine months ended February 28, 2025[12]. - General and administrative expenses rose to $55.8 million for the three months ended February 28, 2025, compared to $52.1 million in the same period of 2024, driven by fixed asset impairment and restructuring charges[93]. - Goodwill impairment charges amounted to $461.4 million during the nine months ended February 28, 2025, with no charges recorded in the prior year[95]. Assets and Equity - Total assets as of February 28, 2025, were $4.04 billion, a decrease from $4.55 billion as of May 31, 2024[10]. - Total stockholders' equity decreased to $2.66 billion as of February 28, 2025, compared to $3.14 billion as of May 31, 2024[10]. - Cash and cash equivalents decreased to $127.71 million as of February 28, 2025, down from $170.61 million as of May 31, 2024[10]. - Neogen's total assets as of February 28, 2025, were $2.597540 billion, reflecting a slight increase from previous periods[19]. Cash Flow and Capital Expenditures - Cash provided by operating activities was $41.702 million for the nine months ended February 28, 2025, compared to $8.517 million in the prior year[22]. - Cash used for investing activities increased by $71.5 million to $83.266 million for the nine months ended February 28, 2025, primarily due to increased capital expenditures[130]. - Capital expenditures for the nine months ended February 28, 2025, were $88.5 million, compared to $87.2 million in 2024[130]. - The company estimates capital expenditures of $100 million for fiscal year 2025, including approximately $70 million for the integration of acquired 3M FSD products[132]. Tax and Compliance - Income tax expense for the three months ended February 28, 2025, was $1,230, while the income tax benefit for the nine months was $22,060, primarily due to pre-tax losses from amortization and interest expenses related to the 3M FSD acquisition[48]. - The company reported a net tax benefit of $22.1 million for the nine months ended February 28, 2025, compared to a tax benefit of $3.9 million in the prior year, influenced by pre-tax losses and goodwill impairment charges[98]. - The company has no required principal payments on its Credit Facilities through fiscal year 2026 and was in compliance with all financial covenants as of February 28, 2025[127]. Shareholder Actions - The Company has authorized a share repurchase program for up to 6,000,000 shares of common stock, with 5,900,000 shares remaining available for repurchase as of February 28, 2025[145]. - No shares were purchased under the repurchase program during the fiscal quarter ended February 28, 2025[145].

Company Performance - Simply Good Foods Company reported second-quarter FY25 sales growth of 15% year-on-year to $359.65 million, exceeding the analyst consensus estimate of $354.4 million [2] - Adjusted EPS of 46 cents also beat the consensus estimate of 40 cents [2] Stock Movements - Venus Concept Inc. shares surged 242% to $9.84 after securing $23.24 million in bridge financing [9] - Phio Pharmaceuticals Corp. shares increased 116% to $2.18 following a recommendation for dose escalation in its Phase 1b trial [9] - 22nd Century Group, Inc. shares rose 19% to $1.25 after announcing new agreements for filtered cigar products [9] - Neogen Corporation shares fell 29% to $4.98 due to worse-than-expected third-quarter results and below-estimate FY25 sales guidance [9] - Vincerx Pharma, Inc. shares dropped 54% to $0.2323 after terminating a potential merger [9] - Bloom Energy Corporation shares decreased 10% to $15.32 after a downgrade from Neutral to Sell by an analyst [9]

Financial Data and Key Metrics Changes - The company's third quarter revenues were $221 million, with core revenue growth of 20 basis points, negatively impacted by foreign currency by 310 basis points compared to the prior year [28][34] - Adjusted EBITDA was $49 million, representing a margin of 22%, with a year-over-year decline driven primarily by lower revenue levels [34] - Gross margin decreased to 49.9%, down 120 basis points from 51.1% in the same quarter a year ago, primarily due to lower revenues [33] Business Line Data and Key Metrics Changes - Food safety segment revenues were $153 million, down 3.2% year-over-year, with core revenue growth of 1.5% offset by negative FX impact [28] - Core revenue in the food safety business grew 7% when excluding sample collection challenges, reflecting solid underlying business performance [15][29] - Animal safety segment revenues were $68 million, with a core revenue decline of 2.6% compared to the prior year [28] Market Data and Key Metrics Changes - Latin America saw double-digit core revenue growth, while Asia-Pacific experienced mid-single-digit growth, and Europe was down mid-single digits [31][32] - The U.S. and Canada region faced mid-single-digit declines, primarily due to carryover impacts from previous shipping delays [32] Company Strategy and Development Direction - The company is focused on improving production efficiency and addressing challenges in the sample collection product line, which has recently returned to prior production levels [15][18] - Strategic actions are being taken to restructure the genomics business, focusing on the differentiated bovine product offering [17][27] - The company is prioritizing debt repayment and improving cash flow through refinancing efforts and reducing capital expenditures [20][21] Management's Comments on Operating Environment and Future Outlook - Management noted a broad development of uncertainty related to U.S. government policies, including spending cuts and tariffs, which could impact food safety testing [7][9] - The company expects the current dynamic environment to continue affecting revenue guidance, with an updated full-year revenue outlook of approximately $895 million [25][38] - Management remains optimistic about the long-term growth opportunities despite current macroeconomic challenges [51] Other Important Information - The company completed the refinancing of its Term Loan A, extending maturity by close to three years and achieving 60 basis points of interest rate savings [20][36] - The leadership team has undergone changes, including new heads for R&D and North America Commercial Organization, to enhance operational effectiveness [22] Q&A Session Summary Question: How much of the lowered guidance is due to macro factors? - Management indicated that approximately $4 million of the $6 million revenue shortfall in Q3 was due to macro uncertainty, with $2 million specifically from China [57][58] Question: Are tariff headwinds affecting margins or sales? - Management clarified that tariff impacts would affect both margins and sales, with an estimated $30 million impact from tariffs, predominantly from China [72][74] Question: What are the critical objectives for the remainder of the year? - Key objectives include driving production efficiency in Petri film manufacturing and managing costs to align with new revenue levels [90][92]

Company Performance - Neogen reported quarterly earnings of $0.10 per share, missing the Zacks Consensus Estimate of $0.13 per share, and down from $0.12 per share a year ago, representing an earnings surprise of -23.08% [1] - The company posted revenues of $220.98 million for the quarter ended February 2025, missing the Zacks Consensus Estimate by 0.92%, and down from $228.81 million year-over-year [2] - Neogen has not surpassed consensus EPS estimates over the last four quarters, although it has topped consensus revenue estimates three times during the same period [2] Stock Performance - Neogen shares have declined approximately 42% since the beginning of the year, compared to a decline of -15.3% for the S&P 500 [3] - The current Zacks Rank for Neogen is 4 (Sell), indicating expectations for the stock to underperform the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $237.04 million, and for the current fiscal year, it is $0.45 on revenues of $908.28 million [7] - The outlook for the Medical - Products industry, to which Neogen belongs, is currently in the bottom 33% of over 250 Zacks industries, which may negatively impact stock performance [8]

Financial Performance - Revenues for the third quarter were $221.0 million, a decrease of 3.4% compared to $228.8 million in the prior year[4] - Net loss for the third quarter was $11.0 million, or $(0.05) per diluted share, compared to a net loss of $2.0 million, or $(0.01) per diluted share, in the prior-year period[5] - Adjusted Net Income was $20.9 million, or $0.10 per diluted share, down from $26.4 million, or $0.12 per diluted share, in the prior-year period[5] - Core revenue growth for the total Neogen in Q3 FY25 was 0.2%, with a total revenue of $220,980 thousand, down from $228,812 thousand in Q3 FY24, reflecting a decline of 3.4%[38] - For the nine months ended February 28, 2025, the net loss was $479,848 thousand compared to a net loss of $4,006 thousand for the same period in 2024[22] - The company’s adjusted net income for the nine months ended February 28, 2025, was $59,616 thousand, down from $74,988 thousand in 2024[34] Segment Performance - Food Safety segment revenues were $152.7 million, a decrease of 3.2% compared to $157.8 million in the prior year, with core growth of 1.5%[9] - Animal Safety segment revenues were $68.2 million, a decrease of 4.0% compared to $71.1 million in the prior year, with a 2.6% core revenue decline[10] Margins and Expenses - Gross margin was 49.9% in the third quarter, down from 51.1% in the same quarter a year ago, primarily due to lower revenue and higher integration costs[6] - Adjusted EBITDA for the third quarter was $48.5 million, representing an Adjusted EBITDA Margin of 22.0%, down from 23.0% in the prior-year period[8] - Adjusted EBITDA for the nine months ended February 28, 2025, was $143,608 thousand, with an Adjusted EBITDA margin of 21.5% compared to 23.3% in 2024[30] - The total interest expense for the nine months ended February 28, 2025, was $52,027 thousand, compared to $49,508 thousand in 2024[30] - The company reported a depreciation and amortization expense of $89,222 thousand for the nine months ended February 28, 2025, slightly up from $87,853 thousand in 2024[22] Cash Flow and Outlook - The company reported cash flows provided by operating activities of $41,702 thousand for the nine months ended February 28, 2025, compared to $8,517 thousand in 2024[22] - Cash and cash equivalents at the end of the year were $127,705 thousand, down from $161,437 thousand at the end of the previous year[22] - The company updated its full-year revenue outlook to approximately $895 million and Adjusted EBITDA to approximately $195 million due to third-quarter results being lower than expected[13] Investment and Production - The company used $83,266 thousand for investing activities in the nine months ended February 28, 2025, compared to $11,786 thousand in 2024[22] - The establishment of the company's own Petrifilm production is progressing well, with the first of two production lines nearly completely installed[3] - The company incurred a goodwill impairment of $461,390 thousand during the nine months ended February 28, 2025[30]

Core Viewpoint - Neogen (NEOG) is expected to report quarterly earnings of $0.13 per share, an increase of 8.3% year-over-year, while revenues are forecasted to decline by 2.5% to $223.03 million [1] Revenue Estimates - Analysts project 'Revenues- Animal Safety' to be $68.77 million, reflecting a decrease of 3.2% from the previous year [4] - The consensus for 'Revenues- Food Safety' is $154.26 million, indicating a year-over-year decline of 2.2% [4] - 'Revenues- Food Safety- Indicator Testing, Culture Media & Other' is estimated at $78.53 million, down 3.3% from the prior year [5] - 'Revenues- Animal Safety- Veterinary Instruments & Disposables' is expected to reach $17.93 million, a slight decrease of 0.3% year-over-year [5] - 'Revenues- Animal Safety- Animal Care & Other' is projected at $10.15 million, showing a year-over-year increase of 0.8% [6] - 'Revenues- Food Safety- Natural Toxins & Allergens' is estimated at $19.62 million, down 0.6% from the previous year [6] - 'Revenues- Food Safety- Rodent Control, Insect Control & Disinfectants' is forecasted to be $10.72 million, reflecting a year-over-year increase of 5.7% [7] - 'Revenues- Food Safety- Bacterial & General Sanitation' is expected to reach $39.60 million, indicating a decline of 2% year-over-year [7] - The consensus for 'Revenues- Animal Safety- Rodent Control, Insect Control & Disinfectants' stands at $21.16 million, down 8.2% from the previous year [8] Stock Performance - Over the past month, Neogen's shares have decreased by 18.5%, compared to a decline of 7.7% in the Zacks S&P 500 composite [8] - Neogen currently holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [8]

Group 1 - Neogen Corporation will release its third-quarter earnings on April 9, 2025, before market opening [1] - A conference call and webcast will be held on the same day at 8:00 a.m. Eastern time to discuss the financial results [1] - The conference call can be accessed via specific toll-free numbers for North America and international callers [1] Group 2 - A replay of the conference call and webcast will be available shortly after the call concludes [2] - The replay can be accessed through designated toll-free numbers and on Neogen's Investor Relations website [2] Group 3 - Neogen Corporation focuses on enhancing global food security through advancements in human and animal well-being [3] - The company offers comprehensive solutions in Food Safety, Livestock, and Pet Health & Wellness markets [3] - Neogen operates in over 140 countries with a dedicated network of scientists and technical experts [3]

Core Points - Neogen Corporation announced that the National Labor Relations Board (NLRB) has withdrawn its unfair labor practices claim against the company following a mutual agreement, with no admission of wrongdoing by Neogen [1] - In the upcoming weeks, employees at the Lansing warehouse will have the opportunity to vote on whether to unionize [2] - Neogen emphasizes its commitment to fostering a supportive and equitable workplace, respecting employees' rights, and complying with legal obligations related to the election process [3] Company Overview - Neogen Corporation is dedicated to enhancing global food security through advancements in human and animal well-being, offering comprehensive solutions in Food Safety, Livestock, and Pet Health & Wellness markets [3] - The company operates in over 140 countries and has a dedicated network of scientists and technical experts focused on delivering optimized products and technology [3]