Core Points - Neogen Corporation announced that the National Labor Relations Board (NLRB) has withdrawn its unfair labor practices claim against the company following a mutual agreement, with no admission of wrongdoing by Neogen [1] - In the upcoming weeks,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]

Core Insights - Neogen Corporation has launched Igenity BCHF, a genomic test aimed at improving bovine heart health standards [1][3] - Bovine Congestive Heart Failure (BCHF) poses a significant threat to cattle health and productivity, and the new test offers a method for better selection based on genetic predisposition [2][3] Industry Impact - Igenity BCHF assesses an animal's genetic risk for BCHF on a scale of 1 to 10, where each decrease in score correlates with an approximately 3.5% lower expected incidence rate for the disease [2] - The test allows producers to manage BCHF risk more effectively, potentially reducing mortality rates in feedlot settings and minimizing economic losses associated with the disease [3][4] Technological Advancement - Igenity BCHF is the first genomic test of its kind, providing insights into the genetic factors contributing to BCHF in cattle [4] - The test results can indicate the likelihood of disease development and the risk that animals may pass on to their offspring [3] Company Overview - Neogen Corporation is dedicated to enhancing global food security through advancements in human and animal well-being, with a presence in over 140 countries [5] - The company focuses on delivering optimized products and technology across various markets, including Food Safety, Livestock, and Pet Health & Wellness [5]

Company Developments - Neogen Corporation (NEOG) launched its new Neogen Molecular Detection Assay 2 – Quantitative Salmonella (MDA2QSAL96), which improves sensitivity and accuracy while providing an easy-to-use workflow [1] - The MDA2QSAL96 kit is part of Neogen's Molecular Detection System pathogen testing platform, which includes various next-generation assays for detecting pathogens [6][7] - The new assay allows poultry producers to verify the effectiveness of their interventions through a quantitative method that delivers excellent consistency and sensitivity [5] Market Performance - Following the announcement of the new assay, NEOG shares increased by 2.1% to $11.60 [2] - Neogen has a current market capitalization of $2.52 billion, with a Zacks Consensus Estimate for fiscal 2025 revenues at $935.1 million, indicating a 1.2% growth from fiscal 2024 [4] Industry Insights - The microbiology testing market, which Neogen operates in, was valued at $5.65 billion in 2024 and is projected to reach $8.78 billion by 2029, growing at a compound annual growth rate of 9.2% [9] - Technological advancements in microbiology testing and the rising incidence of fungal infections are driving market growth [9] Recent Innovations - Earlier in fiscal 2024, Neogen launched the Molecular Detection Assay 2 – Salmonella Enteritidis/Salmonella Typhimurium (MDA2SEST) and CelluSmart technology, further enhancing its offerings in the food safety segment [3] - In December 2024, Neogen introduced the Petrifilm Bacillus cereus Count Plate, adding to its Petrifilm product line for food safety testing [10]

Core Insights - Neogen Corporation has launched the Neogen Molecular Detection Assay 2 – Quantitative Salmonella (MDA2QSAL96), enhancing food safety solutions for the poultry industry [1][2]. Product Features - The MDA2QSAL96 kit combines qualitative pathogen testing with Quantitative Rapid Enrichment Dehydrated (QRED) media, allowing for controlled growth rates and effective quantitation [2]. - This method provides high consistency and sensitivity for poultry rinses and ground poultry meat, streamlining the workflow to save time and resources [2][3]. Technological Advancements - The new assay improves upon existing solutions by offering enhanced sensitivity and accuracy, along with an easy-to-use workflow [3]. - The product is part of a broader Neogen Molecular Detection System that includes various next-generation assays for pathogens such as Salmonella, E. coli O157, and Listeria spp. [3][4]. Market Presence - The Neogen Molecular Detection System is utilized by food processors, universities, governments, and contract testing laboratories across more than 40 countries [4]. - The system employs advanced technologies like isothermal DNA amplification and bioluminescence detection, making it a fast, accurate, and affordable pathogen testing solution [4]. Regulatory Recognition - The U.S. Department of Agriculture Food Safety and Inspection Service (USDA FSIS) has recognized the Neogen Molecular Detection System as the primary method for detecting Salmonella and Listeria species [5]. Company Overview - Neogen Corporation is dedicated to enhancing global food security through scientific and technological advancements, with a presence in over 140 countries [6].

Financial Performance - Total revenues for the three months ended November 30, 2024, were $231.258 million, a slight increase from $229.629 million in the same period of 2023, representing a growth of 0.7%[12] - Product revenues for the six months ended November 30, 2024, were $400.067 million, down 2.9% from $408.270 million in the prior year[12] - The net loss for the three months ended November 30, 2024, was $456.282 million, compared to a net loss of $3.487 million for the same period in 2023, indicating a significant increase in losses[12] - The company reported a gross profit of $113.330 million for the three months ended November 30, 2024, down from $116.774 million in the same period of 2023, a decrease of 3.5%[12] - For the six months ended November 30, 2024, Neogen Corporation reported a net loss of $468,891 thousand, compared to a net loss of $1,984 thousand for the same period in 2023[21] - The company reported a total comprehensive loss of $456,282 thousand for the six months ended November 30, 2024[21] - The company reported a net loss attributable to Neogen of $456.282 million for the three months ended November 30, 2024, compared to a net loss of $3.487 million in the same period of 2023[36] - Basic net loss per share for the three months ended November 30, 2024, was $(2.10), significantly higher than $(0.02) in 2023[36] Assets and Liabilities - Total assets decreased to $4.054 billion as of November 30, 2024, down from $4.549 billion as of May 31, 2024, reflecting a decline of approximately 10.9%[9] - Cash and cash equivalents decreased to $140.231 million from $170.611 million, a decline of 17.8%[9] - Total liabilities as of November 30, 2024, were $1.385 billion, slightly down from $1.405 billion as of May 31, 2024[9] - The ending balance of cash and cash equivalents as of November 30, 2024, was $140,231 thousand, a decrease from $205,765 thousand at the end of the same period in 2023[21] - Neogen's total assets as of November 30, 2024, were $2,669,070 thousand, reflecting a decrease from previous periods[18] Revenue Segments - The Food Safety segment generated $164.238 million in revenue for the three months ended November 30, 2024, compared to $164.403 million in 2023, reflecting a decrease of 0.1%[39] - The Animal Safety segment reported revenues of $67.020 million for the three months ended November 30, 2024, up from $65.226 million in 2023, representing an increase of 2.8%[39] - Domestic revenue for the three months ended November 30, 2024, was $113.761 million, slightly up from $113.554 million in 2023[42] - International revenue for the three months ended November 30, 2024, was $117.497 million, compared to $116.075 million in 2023, indicating a growth of 1.2%[42] - Food Safety segment revenue decreased by $7.1 million for the six months ended November 30, 2024, primarily due to a $14.9 million currency headwind, partially offset by $7.8 million growth in the business[97] - Animal Safety segment revenue increased by $1.8 million for the three months ended November 30, 2024, driven by $2.1 million growth in the business and a $0.2 million favorable currency impact[98] Expenses - Research and development expenses for the six months ended November 30, 2024, were $10.307 million, down from $12.478 million in the prior year, a decrease of 17.4%[12] - The company experienced a depreciation and amortization expense of $59,849 thousand for the six months ended November 30, 2024, slightly up from $58,203 thousand in 2023[21] - General and administrative expenses increased to $57.8 million for the three months ended November 30, 2024, compared to $51.7 million in the same period of 2023, largely due to restructuring charges[86] - Research and development expenses were $5.1 million for the three months ended November 30, 2024, a decrease from $5.8 million in the same period of 2023[90] - The company incurred $7.1 million in restructuring charges impacting the Animal Safety segment's operating income for the three months ended November 30, 2024[103] Goodwill and Impairments - Goodwill impairment of $461.390 million was recorded in the three months ended November 30, 2024, contributing to the overall net loss[12] - The company recorded a goodwill impairment charge of $461.175 million for the Food Safety segment as of November 30, 2024[43] - The company recorded a goodwill impairment charge of $461.4 million in the Food Safety reporting unit during the second quarter of fiscal year 2025[74] Cash Flow and Investments - Cash provided by operating activities for the six months ended November 30, 2024, was $22,339 thousand, down from $38,723 thousand in 2023[21] - Neogen's cash flows used for investing activities totaled $(50,819) thousand for the six months ended November 30, 2024, compared to $2,852 thousand in 2023[21] - Cash used for investing activities increased by $53.7 million during the six months ended November 30, 2024, primarily due to lower proceeds from marketable securities[123] Future Outlook and Risks - The Company anticipates reaching historical production levels in the second half of fiscal year 2025 after resolving delays in production[69] - The Company expects economic headwinds from softening consumer demand and higher interest rates to continue affecting operations throughout fiscal year 2025[65] - The company may need to issue additional equity securities or enter into financing arrangements to meet future capital needs[116] Internal Controls and Compliance - As of November 30, 2024, the company identified material weaknesses in internal control over financial reporting, indicating a reasonable possibility of material misstatements not being prevented or detected[134] - Management is implementing remediation efforts to address identified control deficiencies, including enhancing control activities and documentation, and developing a training program for control owners[139] - The company concluded that its consolidated financial statements fairly present its financial position and results of operations in accordance with US GAAP, despite the identified material weaknesses[135] - Management did not maintain effective controls over period-end invoice accruals, impacting the completeness and accuracy of accrued expenses and capital assets[133] - The company is in the process of hiring qualified personnel to support enhanced control ownership and internal communications[139] - No changes in internal control over financial reporting were identified during the quarter that materially affected the reporting[136] - The company continues to evaluate its risk factors, with no material changes reported since the last annual report[138]

Core Insights - Neogen Corporation (NEOG) reported preliminary second-quarter fiscal 2025 adjusted earnings per share (EPS) of 11 cents, matching the Zacks Consensus Estimate and the previous year's figures [1][2] - The company's stock fell 5.4% to $12.36 following the earnings announcement [2] Revenue Performance - Preliminary revenues for Q2 increased by 0.7% year-over-year to $231.3 million, with core revenues rising by 3.5% [3] - The revenue growth was negatively impacted by acquisitions and discontinued product lines by 0.3% and foreign currency fluctuations by 2.5% [3] Segment Analysis - The Food Safety segment reported revenues of $164.2 million, a slight decrease of 0.1% year-over-year, with core growth of 3.6% [4] - The Animal Safety segment saw revenues of $67.0 million, up 2.8% year-over-year, driven by core growth of 3.2% [5] Margin and Expense Details - Gross profit for Q2 declined by 2.9% year-over-year to $113.3 million, with gross margin contracting by 185 basis points to 49% due to a 4.5% increase in the cost of revenues [6] - Sales and marketing expenses rose by 3.8% to $46.5 million, while administrative expenses increased by 11.7% to $57.8 million [7] Cash Position and Liabilities - Neogen's cash and cash equivalents stood at $140.2 million at the end of Q2, up from $120.5 million at the end of Q1 [8] - The company has total outstanding debt of $900 million and a committed borrowing headroom of $150 million [8] Financial Outlook - Neogen updated its full-year revenue guidance for fiscal 2025 to a range of $905 million to $925 million, down from the previous estimate of $925 million to $955 million [9] - The current Zacks Consensus Estimate for full-year revenues is $935.06 million [9] Operational Challenges - The Food Safety segment faced challenges in sample collection and natural toxins, impacting sales despite efforts to reallocate the 3M sample collection product line [12] - Margin contractions and foreign currency fluctuations were noted as significant headwinds for the company [13]

Financial Data and Key Metrics Changes - The second quarter revenues were $231 million, with core revenue growth of 3.5% excluding foreign currency impacts, acquisitions, and discontinued product lines [27] - Adjusted EBITDA was $51 million, representing a margin of 22.2%, with a sequential improvement of 210 basis points [35] - Gross margin decreased to 49%, down 190 basis points from 50.9% in the same quarter a year ago [35] Business Line Data and Key Metrics Changes - In the food safety segment, revenues were $164 million, flat compared to the prior year, with core growth of nearly 4% led by biosecurity products [28] - The animal safety segment reported revenues of $67 million, with core revenue growth of 3.2% compared to the prior year [30] - Genomics business saw a mid-single-digit decline in core growth year-over-year, primarily due to weakness in the companion animal side [18] Market Data and Key Metrics Changes - Core revenue growth was led by Latin America with double-digit growth, while Europe saw high single-digit growth [32] - The U.S. and Canada region experienced flat core revenue compared to the prior year, impacted by shipping delays [34] Company Strategy and Development Direction - The company is focusing on restructuring its genomics business to enhance profitability and streamline operations [21] - There is an ongoing portfolio review to explore strategic alternatives for parts of the animal safety segment [22] - The company aims to leverage its broad product portfolio to address increasing consumer and regulatory focus on food safety [12][13] Management's Comments on Operating Environment and Future Outlook - Management noted gradual improvement in core revenue growth and free cash flow, despite challenges in the food safety market due to inflation and lower food production [7][8] - The company updated its full-year outlook, citing foreign exchange headwinds and lower genomics revenue as significant factors [24][40] - Management expressed confidence in the long-term prospects of the business despite current challenges, emphasizing the importance of food safety [50] Other Important Information - The company is in the process of ramping up production in its relocated sample collection facility, expecting to reach prior production levels by the end of Q3 [20] - A goodwill impairment charge was recorded due to the acquisition of the former 3M food safety division, reflecting integration complexities [37][43] Q&A Session Summary Question: Implications of lower revenue base on margins - Management acknowledged that while revenue may decrease, focusing on higher quality revenue can support desired margin profiles [56][60] Question: Trends in sample handling and customer retention - Management confirmed that losing product availability has led to customer shifts, but they are regaining market share as production ramps up [64][66] Question: Impact of food regulation changes on business - Management highlighted potential long-term benefits from increased regulatory focus on food safety, positioning the company as a trusted partner [69][72] Question: Magnitude of currency impacts and genomic attrition - Management indicated that foreign exchange and genomics revenue reductions were significant contributors to the guidance reduction [75][76] Question: Customer sentiment regarding sample handling - Management reported improving customer sentiment as supply issues are resolved, leading to regained customer trust [86] Question: Future of animal safety segment - Management expressed confidence in the animal safety segment's recovery, noting positive trends in distributor sales [90]

Group 1 - Neogen reported quarterly earnings of $0.11 per share, matching the Zacks Consensus Estimate, and the same as the previous year [1] - The company posted revenues of $231.26 million for the quarter ended November 2024, exceeding the Zacks Consensus Estimate by 2.16% and showing a slight increase from $229.63 million a year ago [2] - Neogen shares have increased approximately 7.7% since the beginning of the year, outperforming the S&P 500's gain of 0.6% [3] Group 2 - The earnings outlook for Neogen is uncertain, with current consensus EPS estimates at $0.15 for the coming quarter and $0.51 for the current fiscal year [7] - The estimate revisions trend for Neogen is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] - The Medical - Products industry, to which Neogen belongs, is ranked in the bottom 44% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Exhibit 99.1 Neogen Announces Preliminary 1 Second-Quarter 2025 Results 1 Results presented in this release are preliminary and unaudited estimates based on information currently available to the Company. Such results could differ from the final amounts the Company reports in its Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2024. The Company assumes no obligation, and does not intend, to update these estimates prior to filing its Form 10-Q. 2 Non-GAAP financial measures; see expla ...

Revenue of $231.3 million. Net loss of $456.3 million due to non-cash goodwill impairment; $(2.10) per diluted share. Adjusted Net Income2 of $24.4 million; $0.11 per diluted share. Adjusted EBITDA2 of $51.4 million. Updating full-year guidance.LANSING, Mich., Jan. 10, 2025 /PRNewswire/ -- Neogen Corporation (NASDAQ: NEOG) announced today the preliminary results of the second quarter ended November 30, 2024."The second quarter reflected steady progress, as we saw improvement across the business compared to ...