Neogen Corporation Q2 FY2026 earnings call

1. Transformation Focus: Stabilizing and strengthening core, cost structure improvements with ~$20M annualized savings, commercial excellence with process-oriented approach, solutions-based selling in food safety, portfolio elevation in animal safety. 2. Leadership Strengthening: New CFO, chief commercial officer, and other executives with proven track records. 3. Operational Efficiency: Progress on sample collection product line, expecting it to be a positive gross profit contributor in H2 2026. Petrifilm integration on track for 2027 timeline, production testing and validation ongoing. 4. Genomics Divestiture: Process underway, anticipation of Q4 2026 announcement, proceeds for debt reduction.

Food Safety Segment: Revenues were $165.6 million in the quarter, with core revenue growth of 4.1%. Strong growth in indicator testing and culture media, led by sample collection (easy prior year compare) and petri film (recovery from Q1). Pathogens and general sanitation had double-digit growth, while allergens and natural toxins had mixed results. Animal Safety Segment: Revenues were $59.1 million, with core revenue growth approximately flat. Strong growth in insect control products, while veterinary instruments and life sciences had some declines. Global genomics had core revenue growth of 6%, with bovine market growth partially offset by companion animal testing weakness. Regional Performance: LatAm had high single-digit core growth; US and Canada mid-single-digit; APAC low single-digit; EMEA low single-digit.

1. Raised full-year fiscal 2026 guidance: Revenue $845M-$855M, adjusted EBITDA ~$175M. 2. Cautious approach for H2 due to lingering end market weakness and new team settling in. 3. Q4 revenue modestly higher than Q3 (seasonality), adjusted EBITDA margins similar trend. 4. Capital expenditures ~$50M, free cash flow positive.

Macro economic headwinds, execution-related challenges, food production volume declines, plant closures, bankruptcies in food industry, challenges in animal safety due to multiyear trends in production animal herds.

Q: Comment on talent attraction and onboarding impact A: Attracted top-tier talent, experienced leaders are hitting the ground running with onboarding plan focusing on fundamentals.

Q: Sample collection margin impact and outlook A: Sample collection was a challenge, but trend is favorable with improvement in Q2, expecting positive contribution in H2.

Q: Implied margin guidance conservatism A: Prudent approach due to new team, lingering macroeconomic factors, focus on building credibility.

Q: Onetime revenue tailwinds and recurring adjustments A: ~$2M insecticide tailwind in Q2 animal safety; focus on commercial excellence driving organic growth.

Q: Commercial organization changes and confidence in guidance A: Weekly latest best estimate process, customer-centric approach, focus on basics driving Q2 performance.

Q: Petrifilm manufacturing process confidence A: On track for November 2027, late stages of production testing, initial product validation ongoing.

Q: Indicator testing and culture media growth drivers A: Mostly organic growth, focus on specific product lines, petrifilm recovery from distributor inventory correction.

Q: Customer feedback on stockouts and organic growth A: Customers want Neogen to succeed, seen as vital partner in food safety, organic growth driven by volume over price.