Neogen(US:NEOG)2026-01-08 21:07Financial Performance - Total revenues for the three months ended November 30, 2025, were $224.7 million, a decrease of 2.5% compared to $231.3 million for the same period in 2024[12]. - Product revenues decreased to $199.0 million for the three months ended November 30, 2025, down 4.3% from $207.5 million in the prior year[12]. - Gross profit for the six months ended November 30, 2025, was $201.7 million, compared to $218.3 million for the same period in 2024, reflecting a decrease of 7.6%[12]. - Total revenues for the six months ended November 30, 2025, were $448.856 million, a decrease of 2.9% compared to $462.256 million for the same period in 2024[40]. - Net revenue for the six months ended November 30, 2025, was $433.880 million, compared to $448.222 million in the prior year, reflecting a decline of 3.2%[40]. - The net loss attributable to Neogen for the three months ended November 30, 2025, was $15.924 million, compared to a net loss of $456.282 million in the same period of 2024[36]. - Neogen's total comprehensive loss for the six months ended November 30, 2025, was $15,924,000, compared to a comprehensive loss of $456,282,000 in the same period of 2024, showing a significant reduction in losses[20]. Operating Results - Operating loss for the three months ended November 30, 2025, was $5.4 million, significantly improved from a loss of $457.5 million in the same quarter of 2024[12]. - Operating income for the six months ended November 30, 2025, was a loss of $21.468 million, compared to a loss of $455.227 million in the same period of 2024[40]. - Operating income for the Food Safety segment was $16.577 million for the three months ended November 30, 2025, while the Animal Safety segment reported an operating income of $8.825 million[39]. - Operating income for the Food Safety segment increased by $442.6 million for the six months ended November 30, 2025, compared to the same period in 2024, although excluding a $461.4 million goodwill impairment from the prior year, operating income decreased[97]. - Operating income for the Animal Safety segment increased by $9.2 million for the three months ended November 30, 2025, primarily due to a favorable product mix and lower material costs[98]. Cash Flow and Liquidity - Cash and cash equivalents increased to $145.3 million as of November 30, 2025, up from $129.0 million at the end of May 2025[10]. - Cash provided by operating activities for the six months ended November 30, 2025, was $30,297,000, up from $22,339,000 in 2024, indicating a positive trend in operational cash flow[20]. - Cash provided by investing activities increased by $136.9 million during the six months ended November 30, 2025, primarily due to cash proceeds of $121.7 million from the sale of the Cleaners & Disinfectants business[108]. - Cash used for financing activities increased by $99.4 million during the six months ended November 30, 2025, attributed to debt repayments made with proceeds from the sale of the Cleaners and Disinfectants business[109]. - As of November 30, 2025, the company had cash and cash equivalents of $145.3 million and available borrowings under its revolving line of credit of $201.5 million[103]. Assets and Liabilities - Total assets decreased to $3.36 billion as of November 30, 2025, from $3.44 billion as of May 31, 2025[10]. - Total liabilities decreased to $1.26 billion as of November 30, 2025, compared to $1.37 billion as of May 31, 2025[10]. - Long-term debt as of November 30, 2025, totaled $800 million, down from $902.426 million as of May 31, 2025[45]. - The company repaid $100,000,000 in outstanding debt during the financing activities for the six months ended November 30, 2025, reflecting a strategic move to reduce leverage[20]. Segment Performance - Food Safety segment revenue for the three months ended November 30, 2025, was $165.554 million, compared to $164.238 million in 2024, reflecting a growth of 0.8%[39]. - Animal Safety segment revenue decreased to $59.137 million for the three months ended November 30, 2025, down from $67.020 million in 2024, a decline of 11.3%[39]. - Service revenue increased to $25.7 million for the three months ended November 30, 2025, up from $23.7 million in the same period of 2024, driven by higher genomics revenue in bovine and integrated protein markets[81]. Restructuring and Strategic Initiatives - The company initiated a restructuring plan in the second quarter of fiscal year 2026, targeting a reduction of approximately 10% in global headcount[43]. - The company plans to divest its global genomics business, which has been classified as held for sale as of November 30, 2025[32]. - The company is involved in environmental remediation activities at its Randolph, Wisconsin facility, with accrued costs of $916, including $100 in current liabilities and $816 in non-current liabilities[51]. Accounting and Compliance - The company has adopted new accounting pronouncements related to segment reporting and income tax disclosures, which will enhance transparency in financial reporting starting from fiscal year 2026[26][27]. - The company continues to enhance its internal controls to address identified material weaknesses in financial reporting[115]. - The company is in compliance with all financial covenants under its Credit Facilities as of November 30, 2025[104]. Economic Environment - The company faced economic headwinds including elevated interest rates and softening consumer demand, impacting operating results[70]. - The company expects ongoing impacts from economic policy shifts, including increased tariffs affecting costs and sales[73]. - In fiscal year 2025, the company experienced significant inventory write-offs, particularly in the fourth quarter, due to supply chain challenges[72].