Neogen Corp. (NASDAQ:NEOG) stock rose after the company reported better-than-expected second-quarter financial results.Second-quarter 2026 adjusted earnings came in at 10 cents per share, beating the consensus of 6 cents.Sales were $224.69 million, down 2.8% year over year, and exceeded the consensus of $207.85 million. Core revenue increased by 2.9%.“As we look to the second half of the fiscal year, we remain highly focused on the integration of Petrifilm and optimization of sample collection manufacturing ...

Neogen (NasdaqGS:NEOG) Q2 2026 Earnings Call January 08, 2026 08:00 AM ET Company ParticipantsBill Waelke - Head of Investor RelationsBob Labick - PresidentMike Nassif - CEO and PresidentThomas VonDerVellen - Equity Research AssociateBryan Riggsbee - CFOConference Call ParticipantsDavid Westenberg - Senior Research AnalystBrandon Vazquez - Research AnalystThomas DeBourcy - Principal and Senior Equity Research AnalystOperatorGood morning, ladies and gentlemen, and welcome to the Neogen Corporation Q2 FY 2026 ...

Neogen (NasdaqGS:NEOG) Q2 2026 Earnings Call January 08, 2026 08:00 AM ET Company ParticipantsBill Waelke - Head of Investor RelationsBob Labick - PresidentMike Nassif - CEO and PresidentThomas VonDerVellen - Equity Research AssociateBryan Riggsbee - CFOConference Call ParticipantsDavid Westenberg - Senior Research AnalystBrandon Vazquez - Research AnalystThomas DeBourcy - Principal and Senior Equity Research AnalystOperatorGood morning, ladies and gentlemen, and welcome to the Neogen Corporation second qua ...

Financial Data and Key Metrics Changes - Total second quarter revenues reached $224.7 million, reflecting a 2.9% increase on a core basis, with foreign currency contributing 0.9% and divestitures and discontinued products impacting by 6.6% [11][12] - Adjusted EBITDA was $48.7 million, representing a margin of 21.7%, an improvement of 470 basis points from the first quarter [17] - Adjusted net income and adjusted earnings per share were $22.6 million and $0.10, respectively, compared to $9.4 million and $0.04 in the prior quarter [18] Business Line Data and Key Metrics Changes - Food safety segment revenues were $165.6 million, with core revenue growth of 4.1%, driven by strong performance in indicator testing and culture media product categories [12] - Animal safety segment revenues were $59.1 million, with core revenue growth approximately flat compared to the prior year, although biosecurity products saw solid growth [13] - The global genomics business experienced core revenue growth of 6%, with strong performance in the bovine market [14] Market Data and Key Metrics Changes - Core revenue growth in the Latham region was high single digits, while the U.S. and Canada region saw mid-single-digit growth [15] - The APAC region experienced low single-digit core growth, led by pathogen detection products, while the EMEA region had a low single-digit decline [16] - Gross margin improved to 47.5%, a sequential increase of 210 basis points, primarily due to volume and lower tariff costs [17] Company Strategy and Development Direction - The company is focused on stabilizing and strengthening its core business, with a transformation aimed at improving top-line growth and profitability [4] - A rigorous process-oriented approach to commercial excellence is being implemented, emphasizing operational planning and data-driven decisions [5] - The leadership team has been strengthened with experienced operators to drive growth and innovation [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in overcoming macroeconomic and execution-related headwinds, with a positive outlook for the year [4][10] - The company raised its full-year guidance for fiscal 2026, expecting revenues between $845 million and $855 million and adjusted EBITDA of approximately $175 million [19] - Management acknowledged the challenges in the operating environment but believes they are solvable or transitory [10] Other Important Information - The company is in the process of divesting its global genomics business, which is expected to simplify operations and enhance margins [20][21] - Cost structure improvements implemented in the second quarter are expected to deliver approximately $20 million in annualized savings [4] Q&A Session Summary Question: Discussion on the new management team and its impact - Management highlighted the recruitment of top-tier talent with experience in diagnostics and life sciences, emphasizing the importance of operational excellence and alignment within the team [28][29] Question: Concerns about growth and margin expectations for H2 - Management indicated a conservative approach to guidance, focusing on sustainable performance and the need for the new team to settle in [38][39] Question: One-time revenue tailwinds in the quarter - A $2 million insecticide tailwind was noted in the animal safety segment, but no other significant one-time revenues were reported [42] Question: Changes in the commercial organization leading to improved forecasts - The focus on basics and driving simplicity, along with a new weekly forecasting process, has improved organizational alignment and performance [48][49] Question: Confidence in the Petrifilm manufacturing process - Management expressed confidence in the Petrifilm project, stating that production testing is progressing well and remains on track for the November 2027 timeline [51][52]

Financial Performance - Neogen's core revenue increased by 2.9% year-over-year[9] - Adjusted EBITDA margins improved sequentially by 470 bps to 21.7%[9] - Q2 FY26 revenue reached $224.7 million[19] compared to $209.2 million in Q1 FY26 and $231.3 million in Q2 FY25[19] - Adjusted EBITDA for Q2 FY26 was $48.7 million with a margin of 21.7%[20], compared to $35.5 million with a margin of 17.0% in Q1 FY26 and $51.4 million with a margin of 22.2% in Q2 FY25[20] - Adjusted Net Income for Q2 FY26 was $22.6 million[21], or $0.10 per share[21], compared to $9.4 million[21], or $0.04 per share in Q1 FY26[21], and $24.4 million[21], or $0.11 per share in Q2 FY25[21] Segment Performance - Food Safety core revenue grew by 4.1%[23] - Animal Safety core revenue grew by 0.1%[23] Balance Sheet and Capital Allocation - Net debt is $655 million[26] - Debt is 68% fixed[26] - Q2 Free Cash Flow improved by $21 million compared to Q1[28] FY2026 Outlook - Total revenue is projected to be between $845 million and $855 million[32] - Adjusted EBITDA is expected to be approximately $175 million[32] - Capital expenditures are estimated at around $50 million[32] - The effective tax rate is projected at 21%[32]

Key Takeaways Neogen sees gains from product launches, Animal Safety demand and progress on 3M Food Safety integration.NEOG highlights growth across biologics, wound care, substrates, reagents and insect control products.Neogen faces high debt, macro pressures and expects a $10M annualized impact from steep U.S. tariff rates.Neogen Corporation (NEOG) is well-poised to gain in the coming quarters, thanks to its continued product development efforts that enhance its existing offerings and advance its business ...

We came across a bullish thesis on Neogen Corporation on Valueinvestorsclub.com by Dr. Ridgewell. In this article, we will summarize the bulls’ thesis on NEOG. Neogen Corporation's share was trading at $5.92 as of December 1st. NEOG’s trailing and forward P/E were 822.50 and 16.00 respectively according to Yahoo Finance. Soleno Therapeutics (SLNO) Jumps 13.46% as Competitor Fails Prader-Willi Treatment Trial Romaset/Shutterstock.com Neogen presents a compelling opportunity to invest in a high-quality fo ...

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 [12][15] - Adjusted EBITDA was $35.5 million, representing a margin of 17%, impacted by lower revenue, higher tariff costs, and increased operating expenses [21][22] - Free cash flow for the quarter was an outflow of $13 million, 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 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, and reinvigorate innovation without a major strategic overhaul [5][7] - A focus on optimizing the product portfolio for market share gains and profitability, including targeted price increases, is underway [8] - The addition of a Chief Commercial Officer is being pursued to enhance global commercial leadership [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's potential for growth despite current execution challenges, emphasizing the need for improved operational efficiency [4][29] - The CEO highlighted the importance of regaining market share and improving customer relationships as key priorities moving forward [26][39] Other Important Information - The company executed a global headcount reduction of approximately 10%, aiming for annualized savings of about $20 million [7][24] - The divestiture of the cleaners and disinfectants business generated approximately $115 million in net proceeds, which was used to pay down debt [22] Q&A Session Summary Question: Can you discuss the strengths of Neogen and the challenges faced? - The CEO confirmed the company's strong market position and employee dedication, while acknowledging execution challenges that have led to market share losses [33][34] Question: How will the company regain market share with unique products? - The CEO outlined three strategies: leveraging a broad product portfolio, exploring underpenetrated markets, and enhancing execution within the commercial organization [38][39] Question: What is the expected progression of EBITDA margins throughout the year? - The CFO indicated that EBITDA margins are expected to improve as the year progresses, driven by volume increases and cost structure benefits [40] Question: What is the timeline for outlining the company's vision post-CEO transition? - The CEO mentioned that more details on the company's vision will be shared in early 2026, focusing on quick wins and critical projects [44] Question: Can you clarify the $6 million in sample collection costs? - The CFO explained that these costs are related to scrap and quality flags, indicating that the company is currently selling the product at a loss [72] Question: How will the company manage headcount and turnover during this transition? - The CEO emphasized the need for continuous evaluation of resources and the importance of re-engaging employees to drive growth [76][77] Question: Will there be additional divestitures beyond the genomics process? - The CEO confirmed that the company is always in portfolio review mode and will continue to assess product lines for optimization [85][87]

Financial Performance - Neogen's Q1 FY26 revenue was $209.2 million, a decrease from $217.0 million in Q1 FY25[13] - Adjusted EBITDA for Q1 FY26 was $35.5 million, compared to $43.7 million in Q1 FY25, with a margin of 17.0% versus 20.1%[14] - Adjusted Net Income decreased to $9.4 million ($0.04 per share) in Q1 FY26 from $14.4 million ($0.07 per share) in Q1 FY25[15] - Core revenue growth in Food Safety segment was (1.7)%, while Animal Safety segment saw a core revenue growth of 5.8%[17] - The company's gross debt stands at $800 million, with net debt at $661 million[19] - Q1 Free Cash Flow improved by $43 million compared to the prior year[21] Strategic Initiatives and Outlook - A cost-reduction initiative is expected to yield annualized savings of $20 million[11] - The divestiture of Cleaners & Disinfectants funded a $100 million debt paydown[11] - The company reaffirms its full-year outlook with revenue projected between $820 million and $840 million and Adjusted EBITDA between $165 million and $175 million[11, 24] - A headcount reduction of approximately 10% has been implemented to align with the current operating environment[23]

Financial Data and Key Metrics Changes - The fourth quarter revenues were $225 million, with core revenue down 2.9% for the quarter, impacted by foreign currency and discontinued products [19] - Gross margin in Q4 was 41.2%, affected by lower volume, elevated inventory write-offs, and production inefficiencies [23][24] - Adjusted net income for Q4 was $11 million, down from $22 million in the prior year quarter, primarily due to lower adjusted EBITDA [26] Business Line Data and Key Metrics Changes - Food Safety segment revenues were $162 million in Q4, down 3% year-over-year, with a core revenue decline of 1.3% [19] - Animal Safety segment revenues were $64 million, including a core revenue decline of 6.7% compared to the prior year quarter [20] - Genomics core revenue declined low single digits in Q4, reflecting a sequential improvement [20] Market Data and Key Metrics Changes - Core revenue growth in Europe was up mid single digits, while Asia Pacific was down mid single digits [21] - Latin America region saw a mid single digit decline on a core basis, with growth in some product lines offset by declines in others [22] - U.S. and Canada region experienced low single digit growth in food safety core revenue [22] Company Strategy and Development Direction - The company is focused on improving internal processes and managing through current market conditions to capitalize on future opportunities [17] - A targeted improvement plan has been released to manage the transition period effectively [17] - The company is prioritizing pathogen detection and has launched new products to enhance its offerings in the food safety market [10][19] Management's Comments on Operating Environment and Future Outlook - Management noted that end market conditions have worsened, particularly in food safety, due to inflation pressures on food producers [4][5] - The expectation is for revenue in fiscal 2026 to be between $820 million and $840 million, reflecting ongoing market challenges [29] - Management anticipates that gross margin will face headwinds from sample collection and tariffs, but expects improvements in the second half of the fiscal year [30] Other Important Information - The company completed the divestiture of its cleaners and disinfectants business, resulting in approximately $115 million in net proceeds [27] - Free cash flow in Q4 was roughly breakeven, with total capital expenditures declining to $16 million [28] - The company has successfully remediated two Sarbanes-Oxley material weaknesses [31] Q&A Session Summary Question: Why is this the right time to put out guidance with a new CEO? - Management indicated that the guidance reflects a business-as-usual approach and is intended to provide clarity on the upcoming year [37][38] Question: How much of a headwind is built for next year regarding tariffs? - Management confirmed that the $10 million tariff impact is the expected headwind for fiscal 2026 [41] Question: How does the company plan to grow above market despite consumer pressures? - Management highlighted regulatory opportunities and increased testing focus as key growth drivers [44][45] Question: What are the expectations for food safety industry growth? - Management expects food safety testing to grow at a lower rate than historical mid-single digits due to current market conditions [53][54] Question: What is the expected impact of divestitures on operating expenses? - Management noted that most costs associated with divested businesses will go directly with those businesses, with minimal stranded costs remaining [59][60]