Financial Data and Key Metrics Changes - Neogen reported revenue of approximately $209 million for Q1 FY 2026, reflecting a year-over-year increase of 0.3% on a core basis, which was in line with expectations [12][15] - Adjusted EBITDA margin was 17%, impacted by lower revenue, higher tariff costs, and increased operating expenses [21] - Free cash flow for the quarter was an outflow of $13 million, representing an improvement of $43 million compared to the prior year [22][23] Business Line Data and Key Metrics Changes - Food Safety segment revenues were $152 million, down 4.6% year-over-year, with a core decline of 1.7% [15][16] - Animal Safety segment revenues were $57 million, a decline of 0.8%, but core revenue grew by 5.8% [17] - PetriFilm experienced a mid-single-digit decline in core revenue, attributed to distributor inventory adjustments rather than a change in underlying demand [12][16] Market Data and Key Metrics Changes - Core revenue growth was mixed across regions, with LATAM showing mid-single-digit growth, while the U.S. and Canada had low single-digit growth [18] - The APAC region faced challenges, particularly in China and ASEAN countries, impacting overall performance [19] Company Strategy and Development Direction - The company aims to drive top-line growth, right-size its cost base, reinvigorate innovation, and deleverage [5][11] - A global headcount reduction of approximately 10% is expected to save about $20 million annually, with some reinvestment planned for commercial and R&D capabilities [7][24] - The focus will be on optimizing the product portfolio for market share gains and profitability, particularly in high-growth markets [8][11] Management's Comments on Operating Environment and Future Outlook - The new CEO emphasized the need for improved execution to regain market share and enhance operational efficiency [4][26] - Management expressed confidence in reaffirming full-year guidance, anticipating improvements in margins and cash flow as the year progresses [23][29] Other Important Information - The company completed the divestiture of its Cleaners and Disinfectants business, generating approximately $115 million in net proceeds used to pay down debt [22] - The integration of the PetriFilm production process is on track, with expectations for completion in the second quarter of the next fiscal year [10][11] Q&A Session Summary Question: Can you discuss the strengths of Neogen and the challenges faced? - The new CEO highlighted the strong market position and dedicated workforce, acknowledging execution challenges that have impacted market share [33][34] Question: How will the company regain market share with unique products? - The CEO outlined three strategies: leveraging a broad product portfolio, targeting underpenetrated markets, and enhancing commercial execution [38][39] Question: What is the timeline for outlining the company's vision? - The CEO indicated that more details would be shared in early 2026 as he gains more insight into the company's operations [44] Question: Can you clarify the impact of inventory and cash flow challenges? - Management acknowledged that inventory write-offs and sample collection inefficiencies are significant challenges but expressed confidence in improving these areas [46][48] Question: How is the company addressing the headcount reduction and turnover? - The CEO emphasized the importance of ongoing evaluation of resources and the need to engage the workforce to drive growth [76][77]