UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 29, 2024. or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-17988 Neogen Corporation (Exact name of registrant as specified in its charter) Michigan 38-2367843 (State or other jurisdict ...

(4) Income tax expense associated with non-deductible transaction costs that were recognized as expense in prior periods. (5) Tax effect of adjustments is calculated using projected effective tax rates for each applicable item. Disclaimer This presentation includes "forward-looking statements" as that term is defined in Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on Neogen's current expecta ...

Exhibit 99.1 Neogen Announces Third-Quarter 2024 Results LANSING, Mich., April 9, 2024 – Neogen Corporation (NASDAQ: NEOG) announced today the results of the third quarter ended February 29, 2024. "The third quarter saw us complete a number of milestone achievements related to the integration of the former 3M Food Safety business," said John Adent, Neogen's President and Chief Executive Officer. "We completed the relocation of the pathogen detection product line and the initial phases of the relocation of t ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Interim Condensed Consolidated Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Interim%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section presents Neogen's unaudited financial statements for the three and six months ended November 30, 2023 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The company's total assets stood at $4.60 billion, primarily composed of goodwill and intangible assets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | November 30, 2023 | May 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $624,373 | $585,931 | | **Goodwill** | $2,137,983 | $2,137,496 | | **Intangible assets, net** | $1,564,744 | $1,605,103 | | **Total Assets** | **$4,602,415** | **$4,554,432** | | **Total Current Liabilities** | $176,612 | $145,472 | | **Non-Current Debt** | $886,915 | $885,439 | | **Total Liabilities** | **$1,454,848** | **$1,420,215** | | **Total Stockholders' Equity** | **$3,147,567** | **$3,134,217** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the second quarter, revenues were flat while the net loss narrowed significantly to $3.5 million Statement of Operations Summary (in thousands, except per share amounts) | Metric | Q2 2023 | Q2 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $229,629 | $230,033 | $458,616 | $362,382 | | **Gross Profit** | $116,774 | $112,539 | $233,535 | $174,809 | | **Operating Income (Loss)** | $14,465 | $(7,656) | $33,600 | $(1,594) | | **Net Loss** | $(3,487) | $(41,841) | $(1,984) | $(36,632) | | **Diluted Net Loss Per Share** | $(0.02) | $(0.19) | $(0.01) | $(0.23) | [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) The company reported a total comprehensive income of $6.1 million for the six-month period, a reversal from a loss in the prior year Comprehensive (Loss) Income Summary (in thousands) | Component | Q2 2023 | Q2 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net loss** | $(3,487) | $(41,841) | $(1,984) | $(36,632) | | **Other comprehensive income (loss), net of tax** | $1,368 | $(1,172) | $8,123 | $(12,729) | | **Total comprehensive (loss) income** | **$(2,119)** | **$(43,013)** | **$6,139** | **$(49,361)** | [Condensed Consolidated Statements of Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total stockholders' equity increased slightly to $3.148 billion, driven by other comprehensive income - Total equity increased by approximately **$13.4 million** during the first six months of fiscal 2024, from $3,134.2 million to $3,147.6 million[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash from operations improved significantly, generating $38.7 million for the six-month period Cash Flow Summary (in thousands) | Activity | Six Months Ended Nov 30, 2023 | Six Months Ended Nov 30, 2022 | | :--- | :--- | :--- | | **Net Cash From (For) Operating Activities** | $38,723 | $(32,869) | | **Net Cash From Investing Activities** | $2,852 | $174,640 | | **Net Cash From (For) Financing Activities** | $752 | $(78,356) | | **Net Increase In Cash and Cash Equivalents** | $42,525 | $55,527 | | **Cash and Cash Equivalents, End of Period** | $205,765 | $100,000 | [Notes to Interim Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section details accounting policies, segment data, and specifics on the 3M Food Safety Division transaction - The company operates in two primary segments: **Food Safety**, which provides diagnostic test kits and related products, and **Animal Safety**, which offers veterinary instruments, pharmaceuticals, and genomics testing services[23](index=23&type=chunk)[24](index=24&type=chunk) Disaggregated Revenue by Segment (Six Months Ended Nov 30, 2023, in thousands) | Segment | Product Revenue | Service Revenue | Total Revenue | | :--- | :--- | :--- | :--- | | **Food Safety** | $315,264 | $15,417 | $330,681 | | **Animal Safety** | $93,006 | $34,929 | $127,935 | | **Total** | **$408,270** | **$50,346** | **$458,616** | - On September 1, 2022, Neogen completed its Reverse Morris Trust transaction with 3M's Food Safety Division for a total consideration of **$3.2 billion**, consisting of $2.2 billion in stock and $1.0 billion in cash[84](index=84&type=chunk)[85](index=85&type=chunk) - As of November 30, 2023, the company had total debt of approximately **$900 million**, comprising a $550 million term loan and $350 million in senior notes, incurred to finance the 3M transaction[97](index=97&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses flat Q2 revenues, improved net loss, and progress on the 3M business integration Q2 FY2024 Key Performance Metrics | Metric | Q2 2023 | Q2 2022 | % Change | | :--- | :--- | :--- | :--- | | **Revenues** | $229,629 | $230,033 | (0)% | | **Core Sales Growth** | | | (1)% | | **Net Loss** | $(3,487) | $(41,841) | (92)% | | **Loss per Diluted Share** | $(0.02) | $(0.19) | | - Gross margin improved by **200 basis points** in the second quarter to 50.9%, primarily due to a favorable product mix from increased sales of higher-margin products in the Food Safety segment[145](index=145&type=chunk) - Operating income was **$14.5 million** compared to a loss of $7.7 million in the prior year, largely because Q2 2022 included $39.1 million in transaction and integration costs versus only $4.7 million in Q2 2023[150](index=150&type=chunk)[151](index=151&type=chunk) Non-GAAP Adjusted EBITDA (in thousands) | Metric | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | **Adjusted EBITDA** | $55,100 | $64,051 | | **Adjusted EBITDA margin %** | 24.0% | 27.8% | [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rate and foreign currency exchange rate fluctuations Market Risk Sensitivity Analysis (in thousands) | Risk Category | Hypothetical Change | Potential Impact on Earnings/Fair Value | | :--- | :--- | :--- | | **Foreign Currency—Revenue** | 10% Decrease in exchange rates | $11,608 (Earnings) | | **Interest Expense** | 10% Increase in interest rates | $2,227 (Earnings) | [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective due to identified material weaknesses - The company's CEO and CFO concluded that **disclosure controls and procedures were not effective** as of November 30, 2023[190](index=190&type=chunk) - The ineffectiveness is due to previously reported material weaknesses in three areas: (1) **information technology general controls (ITGCs)**, (2) **period-end invoice accrual controls**, and (3) **management review controls related to acquisition accounting**[192](index=192&type=chunk) - Remediation efforts are ongoing, but the material weaknesses will not be considered fully remediated until the new and enhanced controls have operated effectively for a sufficient period of time[193](index=193&type=chunk)[194](index=194&type=chunk) [PART II. OTHER INFORMATION](index=40&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings not expected to have a material financial impact - The company is subject to legal proceedings in the normal course of business, which management believes **will not have a material effect** on its financial condition[113](index=113&type=chunk)[197](index=197&type=chunk) [Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have been identified since the last annual report - **No material changes** have occurred in the risk factors described in the company's Annual Report on Form 10-K for the year ended May 31, 2023[198](index=198&type=chunk) [Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and incentive plans - The report includes several exhibits, such as **CEO and CFO certifications** (Exhibits 31.1, 31.2, 32), the Neogen Corporation 2023 Omnibus Incentive Plan (Exhibit 10.2), and Inline XBRL documents[201](index=201&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (State or other jurisdiction of incorporation or organization) Michigan 38-2367843 (IRS Employer Identification Number) FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 31, 2023. or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-17988 N ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended May 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Transition Period From To . COMMISSION FILE NUMBER 0-17988 NEOGEN CORPORATION (Exact name of registrant as specified in its charter) (State of other jurisdiction of incorporation organization) MICHIGAN ...

Disclaimer Preliminary Results and Forward-Looking Statements This presentation includes "forward-looking statements" as that term is defined in Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on Neogen's current expectations and are subject to risks and uncertainties, which could cause actual results to differ from those stated or implied by such forward-looking statements. Should one or more ...

PART I. FINANCIAL INFORMATION [Item 1. Interim Condensed Consolidated Financial Statements (unaudited)](index=2&type=section&id=Item%201.%20Interim%20Condensed%20Consolidated%20Financial%20Statements%20%28unaudited%29) This section presents Neogen's unaudited interim financial statements, reflecting significant changes from the 3M Food Safety Division merger [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets surged to **$4.51 billion** and liabilities to **$1.38 billion** due to the 3M merger Condensed Consolidated Balance Sheets (in thousands) | | February 28, 2023 | May 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $555,371 | $626,798 | | **Goodwill** | $2,135,118 | $142,704 | | **Amortizable intangible assets, net** | $1,620,229 | $92,106 | | **Total Assets** | **$4,508,764** | **$992,929** | | **Total Current Liabilities** | $107,155 | $77,844 | | **Non-current debt** | $884,701 | $— | | **Total Liabilities** | **$1,383,209** | **$105,555** | | **Total Stockholders' Equity** | $3,125,555 | $887,374 | | **Total Liabilities and Stockholders' Equity** | **$4,508,764** | **$992,929** | [Condensed Consolidated Statements of Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20%28Loss%29) Q3 revenues rose **70%** to **$218.3 million**, but nine-month net loss was **$28.4 million** due to merger costs Condensed Consolidated Statements of Income (Loss) (in thousands) | | Three Months Ended Feb 28, 2023 | Three Months Ended Feb 28, 2022 | Nine Months Ended Feb 28, 2023 | Nine Months Ended Feb 28, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $218,255 | $128,244 | $580,637 | $387,066 | | **Gross Margin** | $107,964 | $57,412 | $282,773 | $178,014 | | **Operating Income** | $15,684 | $6,377 | $14,090 | $40,591 | | **Interest Expense** | $(17,460) | $(35) | $(38,007) | $(63) | | **Net Income (Loss)** | **$8,190** | **$5,443** | **$(28,442)** | **$33,348** | | **Diluted EPS** | **$0.04** | **$0.05** | **$(0.16)** | **$0.31** | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) For the nine months, total comprehensive loss was **$33.9 million**, driven by net loss and foreign currency translations Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | | Nine Months Ended Feb 28, 2023 | Nine Months Ended Feb 28, 2022 | | :--- | :--- | :--- | | Net income (loss) | $(28,442) | $33,348 | | Foreign currency translations | (6,677) | (9,482) | | Unrealized gain (loss) on marketable securities, net of tax | 674 | (1,582) | | Unrealized gain on derivative instruments, net of tax | 550 | — | | **Total comprehensive income (loss)** | **$(33,895)** | **$22,284** | [Condensed Consolidated Statements of Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total stockholders' equity increased to **$3.13 billion**, driven by **$2.26 billion** in common stock issued for the 3M merger - On September 1, 2022, the company issued **108,270,000 shares** for the 3M transaction, increasing common stock by **$17.3 million** and additional paid-in capital by **$2.25 billion**[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Nine-month operating cash flow was **$(49.9) million**, with **$194.2 million** from investing activities Net Cash Flow Summary (Nine Months Ended Feb 28, in thousands) | Category | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash (For) From Operating Activities | $(49,938) | $47,648 | | Net Cash From (For) Investing Activities | $194,163 | $(80,130) | | Net Cash (For) From Financing Activities | $(118,333) | $7,842 | | **Net Increase (Decrease) In Cash** | **$22,661** | **$(32,723)** | [Notes to Interim Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the **$3.2 billion** 3M Food Safety Division merger, including purchase price allocation and new debt financing - On September 1, 2022, Neogen completed its merger with 3M's Food Safety Division (3M FSD) in a Reverse Morris Trust transaction. The purchase consideration was **$3.2 billion**, consisting of **108.3 million shares** of Neogen common stock. Post-merger, former 3M FSD stockholders own approximately **50.1%** of Neogen[23](index=23&type=chunk) - The 3M FSD merger added **$1.98 billion** to goodwill and **$1.56 billion** to identifiable intangible assets, including customer relationships (**$1.17B**), developed technology (**$280M**), and trade names (**$110M**)[86](index=86&type=chunk)[88](index=88&type=chunk)[90](index=90&type=chunk) - In connection with the 3M FSD acquisition, the company incurred **$1 billion** in new debt, consisting of a **$650 million** term loan facility and **$350 million** in **8.625%** senior notes due 2030[100](index=100&type=chunk)[107](index=107&type=chunk) - In November 2022, the company entered into an interest rate swap agreement to fix the interest rate on **$250 million** of its variable-rate term loan at a fixed rate of **6.215%**[122](index=122&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the 3M merger's impact, with Q3 revenues up **70%** and a nine-month net loss of **$28.4 million** [Trends and Uncertainties](index=28&type=section&id=Trends%20and%20Uncertainties) The company faces macroeconomic challenges including inflation, supply chain disruptions, and the Russia-Ukraine conflict - The company experienced higher than normal input cost inflation (transportation, supply chain, labor), which negatively impacted operating results. Pricing actions have mitigated some, but not all, of these pressures[127](index=127&type=chunk) - The Russia-Ukraine conflict has caused intermittent material shortages and increased costs for transportation, energy, and raw materials, adversely impacting European operations[128](index=128&type=chunk) - COVID-19 continues to cause supply chain difficulties, including vendor disruptions, shipping issues, increased shipping costs, and labor shortages[131](index=131&type=chunk) [Executive Overview](index=29&type=section&id=Executive%20Overview) Q3 revenues grew **70%** to **$218.3 million**, with a nine-month net loss of **$28.4 million** Financial Highlights (Nine Months Ended Feb 28) | Metric (in thousands, except %) | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | **Revenues** | $580,637 | $387,066 | 50% | | **Core Sales Growth** | 5% | N/A | N/A | | **Net (Loss) Income** | $(28,442) | $33,348 | (185)% | | **Adjusted EBITDA** | $142,341 | $83,343 | 71% | | **Cash (for) from Operations** | $(49,938) | $47,648 | N/A | - The 3M Food Safety Division (FSD) contributed **$87.0 million** and **$179.7 million** in revenue for the three and nine months ended February 28, 2023, respectively. All FSD revenue is reported within the Food Safety segment[134](index=134&type=chunk) [Revenues](index=31&type=section&id=Revenues) Total revenues increased **50%** to **$580.6 million** for nine months, driven by the 3M FSD business Revenue by Segment (Nine Months Ended Feb 28, in thousands) | Segment | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Food Safety | $377,528 | $192,610 | 96% | | Animal Safety | $203,109 | $194,456 | 4% | | **Total Revenues** | **$580,637** | **$387,066** | **50%** | - The 3M FSD acquisition significantly boosted the 'Bacterial & General Sanitation' and 'Culture Media & Other' product lines within the Food Safety segment, with YTD growth of **163%** and **219%** respectively[142](index=142&type=chunk) [Gross Margin](index=33&type=section&id=Gross%20Margin) Gross margin improved to **49.5%** in Q3, primarily due to higher-margin products from the acquired 3M FSD business - Gross margin increased to **49.5%** in Q3 FY23 from **44.8%** in Q3 FY22. The increase was primarily due to incremental revenues from the higher-margin FSD merger products[156](index=156&type=chunk) - Legacy Neogen Food Safety gross margin improved by **20 basis points**, and Animal Safety gross margins increased by **220 basis points**, driven by pricing actions and declining freight costs[156](index=156&type=chunk) [Operating Expenses](index=33&type=section&id=Operating%20Expenses) Operating expenses nearly doubled to **$268.7 million** for nine months due to 3M FSD transaction and amortization costs - For the nine months ended Feb 28, 2023, operating expenses increased to **$268.7 million** from **$137.4 million** year-over-year[157](index=157&type=chunk) - General and administrative expenses for the nine months of FY2023 included **$55.8 million** in transaction/integration fees and **$40.6 million** in amortization of intangibles from the FSD merger[160](index=160&type=chunk) - Sales and marketing expenses for the nine months increased to **$98.3 million** from **$63.2 million**, driven by **$27.7 million** in absorbed expenses from the FSD transaction[158](index=158&type=chunk) [Operating Income](index=34&type=section&id=Operating%20Income) Operating income for nine months fell to **$14.1 million**, with margin compressing to **2.4%** due to higher expenses Operating Income Comparison | Metric | Nine Months Ended Feb 28, 2023 | Nine Months Ended Feb 28, 2022 | | :--- | :--- | :--- | | **Operating Income** | $14.1 million | $40.6 million | | **Operating Margin** | 2.4% | 10.5% | [Other (Expense)/Income](index=34&type=section&id=Other%20%28Expense%29%2FIncome) Total other expense was **$43.8 million** for nine months, primarily due to **$38.0 million** in new debt interest Other (Expense)/Income Breakdown (Nine Months Ended Feb 28, 2023, in thousands) | Item | Amount | | :--- | :--- | | Interest income | $2,163 | | Interest expense | $(38,007) | | Foreign currency transactions | $(6,287) | | Loss on sale of minority interest | $(1,516) | | **Total Other (Expense) Income** | **$(43,782)** | [Net Income (Loss)](index=35&type=section&id=Net%20Income%20%28Loss%29) Neogen incurred a net loss of **$28.4 million** for nine months, driven by significant 3M FSD merger-related costs - The company reported a net loss of **$28.4 million** for the nine months ended Feb 28, 2023, compared to a net income of **$33.3 million** in the prior year[167](index=167&type=chunk) - The decline in earnings was primarily due to merger-related costs: **$55.8M** in transaction fees, **$40.6M** in amortization, **$38.0M** in interest expense, and **$1.3M** in goodwill impairment[167](index=167&type=chunk) [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA for nine months was **$142.3 million** and Adjusted Net Income was **$75.4 million** Reconciliation of Net Income (Loss) to Adjusted EBITDA (Nine Months Ended Feb 28, in thousands) | | 2023 | 2022 | | :--- | :--- | :--- | | **Net (Loss) Income** | **$(28,442)** | **$33,348** | | Provision for income taxes | (1,250) | 7,950 | | Depreciation and amortization | 59,938 | 17,833 | | Interest expense (income), net | 35,844 | (741) | | **EBITDA** | **$66,090** | **$58,390** | | Share-based compensation | 7,311 | 5,045 | | Certain transaction fees and integration costs | 55,754 | 19,908 | | Other adjustments | 13,186 | — | | **Adjusted EBITDA** | **$142,341** | **$83,343** | Reconciliation of Net Income (Loss) to Adjusted Net Income (Nine Months Ended Feb 28, in thousands) | | 2023 | 2022 | | :--- | :--- | :--- | | **Net (Loss) Income** | **$(28,442)** | **$33,348** | | Amortization of acquisition-related intangibles | 46,637 | 5,432 | | Certain transaction fees and integration costs | 55,754 | 19,908 | | Other adjustments | 26,965 | 5,045 | | Estimated tax effect of above adjustments | (24,864) | (6,873) | | **Adjusted Net Income** | **$75,446** | **$56,860** | [Financial Condition and Liquidity](index=38&type=section&id=Financial%20Condition%20and%20Liquidity) Cash decreased to **$183.2 million**, reflecting cash used for operations and **$100 million** debt repayment - Cash, cash equivalents, and marketable securities decreased to **$183.2 million** as of Feb 28, 2023, from **$381.1 million** as of May 31, 2022[184](index=184&type=chunk) - The company repaid **$100 million** of its term loan principal during fiscal year 2023[184](index=184&type=chunk)[189](index=189&type=chunk) - Net accounts receivable increased to **$146.4 million** from **$99.7 million**, and net inventory increased to **$143.9 million** from **$122.3 million**, primarily due to the FSD business integration[185](index=185&type=chunk)[187](index=187&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate and foreign exchange risks, mitigated by derivative financial instruments - The company has foreign exchange risk exposure from operations in numerous countries, with primary currencies being the British pound sterling, euro, Mexican peso, Brazilian real, and Chinese yuan. Derivative instruments are used to manage this risk[194](index=194&type=chunk) Market Risk Sensitivity Analysis (as of Feb 28, 2023) | Risk Category | Hypothetical Change | Impact on Earnings/Fair Value (in thousands) | | :--- | :--- | :--- | | Foreign Currency—Revenue | 10% Decrease in exchange rates | $43,334 (Earnings) | | Foreign Currency—Hedges | 10% Decrease in exchange rates | $1,850 (Fair Value) | | Interest Income | 10% Decrease in interest rates | $194 (Earnings) | | Interest Expense | 10% Increase in interest rates | $1,998 (Earnings) | [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls are effective, with no material changes to internal control over financial reporting - Based on an evaluation as of February 28, 2023, the CEO and CFO concluded that the Company's disclosure controls and procedures are effective[197](index=197&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[198](index=198&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, including an OFAC investigation and environmental remediation - The company received an administrative subpoena from the U.S. Treasury's Office of Foreign Assets Control (OFAC) regarding activities involving parties in Iran. A reserve of **$600,000** was recorded in fiscal 2020 for potential fines[114](index=114&type=chunk)[115](index=115&type=chunk) - The company is involved in environmental remediation and monitoring at its Randolph, Wisconsin facility, with an estimated remaining liability of **$916,000**[113](index=113&type=chunk) [Item 1A. Risk Factors](index=41&type=page&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for May 31, 2022 - There have been no material changes in the risk factors described in the Annual Report on Form 10-K for the year ended May 31, 2022[200](index=200&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO/CFO certifications and Inline XBRL documents - The exhibits filed with this report include: - 31.1: Certification of Principal Executive Officer - 31.2: Certification of Principal Financial Officer - 32: Certification Pursuant to 18 U.S.C. Section 1350 (Sarbanes-Oxley Act of 2002) - 101 & 104: Inline XBRL Data Files[202](index=202&type=chunk)

Financial Data and Key Metrics Changes - The company reported revenues of $218 million for the third quarter, a 70% increase compared to the same quarter a year ago, with core growth of 4% [19] - Adjusted EBITDA was $51 million, representing a growth of 106% from the prior year quarter, with an adjusted EBITDA margin of 23.5%, an increase of 410 basis points year-over-year [30] - Gross margin increased to 49.5%, up 470 basis points from 44.8% in the same quarter last year, primarily due to the addition of higher margin business from the 3M Food Safety transaction [30][31] Business Line Data and Key Metrics Changes - Revenues in the Food Safety segment were $152 million, a 141% increase year-over-year, with core growth of 6% [20] - The Animal Safety segment reported revenues of $67 million, up 2% year-over-year on both a core and reported basis [21] - Core revenue in the Food Safety business acquired from 3M experienced a pro forma decline of 2% due to lower than expected production levels [25] Market Data and Key Metrics Changes - Worldwide genomics revenue increased by high single digits on a core basis, driven by growth in global beef markets, although there was weakness in China due to COVID-related lab closures [23] - The company noted macro-related softening in end markets, particularly affecting feed producers and the Animal Safety side of the business [5][6] Company Strategy and Development Direction - The company is focused on the ongoing integration of the Food Safety business acquired from 3M, with significant progress in commercial activities and infrastructure scaling [13][14] - A new distribution center in Mount Sterling, Kentucky, has been opened to enhance efficiency in serving customers [14] - The company is implementing a data strategy through Neogen Analytics, which aims to leverage structured data and analytics to improve food safety processes [37][38] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic headwinds affecting production and sales, particularly in the Food Safety segment, but expressed optimism about future improvements [5][34] - The company anticipates mid-single digit core growth for the second half of fiscal year 2023, although results may trend towards the lower end of that range due to production losses [33][34] - Management emphasized the importance of addressing backlog issues and ensuring continuity of supply to meet customer demand [26][34] Other Important Information - The company completed the acquisition of Corvium, a SaaS provider, to accelerate its organic data strategy [32] - The cash position at the end of the quarter was $183 million, impacted by integration CapEx and timing of interest payments [33] Q&A Session Summary Question: Can you quantify the backlog of Petrifilm sales in the quarter? - The backlog number was approximately $7 million, and while there has been some improvement, the company is still in an allocation situation [18] Question: What are the expectations for core growth in the 3M business? - The company does not anticipate significant improvement in the 3M business sequentially, expecting it to perform in the mid-single digit range [55] Question: How is the company managing debt and free cash flow? - The company noted elevated leverage due to integration CapEx and timing of interest payments, but remains focused on deleveraging [64][66] Question: What are the challenges with the Petrifilm manufacturing? - The primary issue is manufacturing capacity, not logistics or invoicing, and the company is working closely with customers to manage allocations [70][74] Question: Can you discuss integration and cost savings? - The company expects to gain efficiencies over time once transition service costs are reduced, but is not ready to quantify these savings yet [76]

Three Months Ended February 28, Adjusted Net Income (2) Expenses associated with goodwill and intangible impairments, and inventory scrap amounts related to certain discontinued product lines. 9 Non-GAAP Reconciliations Nine Months Ended February 28, | --- | --- | --- | --- | --- | --- | --- | --- | --- | |------------------------------------------------------|-------|--------------|-------|--------------|-------|-----------------|-------|---------------| | Net income (loss) | ട് | 2023 \n8,190 | දි | 2022 ...