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- **Cost Restructuring Success**: $20M annualized savings from 10% headcount reduction, with $12M FY26 benefit.
- **Petrifilm Recovery**: U.S. sellout growth signals underlying demand, despite Q1 revenue decline.
- **Cash Flow Improvement**: Free cash flow outflow reduced by $43M YoY, driven by working capital efficiency.
- **Strategic Focus**: 2026 priorities include food safety market share gain, sample collection productivity, and Petrifilm production transition.
- **Margin Expansion Path**: Targeting EBITDA margin expansion through OpEx savings and operational efficiency gains.

**【Management Opening Remarks】**
- New CEO Mikhael Nassif emphasized Neogen's leadership in food and animal safety, while acknowledging past execution challenges. 
- CFO Dave Naemura highlighted Q1 revenue of $209M (flat YoY core basis) and reaffirmed full-year guidance despite headwinds in sample collection and Petrifilm.

**【CEO Strategic Priorities】**
- **Cost Restructuring**: 10% headcount reduction ($20M annualized savings) to align costs with current revenue levels.
- **Top-Line Growth**: Targeting U.S. food safety market share gains, with Petrifilm U.S. sellout growth despite Q1 revenue decline.
- **Operational Efficiency**: S&OP process improvements to reduce inventory write-offs and streamline supply chain.
- **Innovation Reboot**: Focused R&D pipeline on high-impact projects, including Petrifilm production transfer to U.S. by Q2 2026.

**【CFO Financial Highlights】**
- **Revenue**: $209M (Q1 FY26), +0.3% core YoY. Food Safety segment (-4.6% YoY) offset by Animal Safety (+5.8% YoY).
- **Margins**: Adjusted EBITDA $35.5M (17% margin), impacted by sample collection inefficiencies and tariffs.
- **Cash Flow**: Free cash flow outflow of $13M (vs. -$56M prior year), driven by lower CapEx and working capital improvements.
- **Debt**: $800M gross debt, with $115M proceeds from C&D divestiture reducing interest costs by ~$6M/year.

**【Q&A Key Themes】**
- **Share Regain Strategy**: CEO Nassif outlined commercial excellence initiatives, including targeted price increases and channel optimization.
- **Margin Outlook**: CFO Naemura expects EBITDA margin expansion through Q4, driven by OpEx savings ($12M FY26) and sample collection productivity gains.
- **Petrifilm Confidence**: CEO highlighted strong U.S. sellout trends and on-track production transfer timeline, targeting incremental margin improvement.
- **Genomics Sale Progress**: Ongoing discussions, with potential impact on FY26 guidance if finalized.


Neogen Corporation (NEOG) Q1 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

NEOG

NEOG fundamentals

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