NEOG - Earnings call transcript Q1 2019

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Operator

Welcome to the Neogen’s First Quarter FY 2019 Earnings Announcement Conference Call. My name is John and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note the conference is being recorded. turn over now John will I the to call Adent. And

John Adent

reporting welcome John. and regular be on quarter August Good which you, fiscal to our analysts. the XXXX of morning, we’ll XX. investors Thank ended for and our year, first call quarterly Today, on conference

that could differ uncertainties. statements, part discuss As are of are we Commission. usual, today subject some from The forward-looking associated as to business with Form Exchange statements the Securities termed of and the actual in XX-K course, may results statements. those here risks risks and our The made be These company's today. filed the forward-looking as with in covered

also those addition who of the joining you you Internet. to via conference, are by In I those welcome joining of are us who live telephone

as press Quinlan, quarter. issued we'll our notice our Jim ever. the prepared live this financial follow Neogen the first Those still in today and the he’s more on of operations, who've our this lead provide Following Financial a detail today, and and quarter. and will quarter the announcing XXXX Earlier fiscal take a succession comments Steve financial starting Jim Neogen’s I something with and questions results here active international results me that little our this keeping provide Neogen from here, with year. genomics his He’s quarter. participants I on who Officer. Chief release perspective is of over Steve will reporting decided joined entertain this would plan, Jim of In regularly might with Herbert you our our conference. morning, different

to from we has our from last stock our option year’s which On in benefits been XX% per to split. $X.XX, due increased US tax again a December exercises. tax $X.XX earnings XXXX XXXX the our corporate stock stated income net from December reform restated increased share from As employee basis, benefited and the release, as

Neogen were quarter September the relative and Our expect we in and not of most Colitag is Australasia in included certainly from the from acquisitions increase and expect bluntly, ourselves. what us not revenues only you XXXX of from Put X% from up what X% revenue minor contributions XXXX.

focus quarter hitting million in great, the started goal growth revenues needed new goal fiscal our course, we year Our a than of span revenues was, our affected of in the doubling reaching slowly fourth The built our again we quarter. the of reach our planned. first $XXX five-year annual more then and in in excitement to but double-digit

the them of new months, I'm the future. yet. contributions Over the they course to the and the brought several have to dozen making we speed or time look make forward had so. responsibilities of team will probably get full the up several and about progress for to last reassigned in on they're half excited another managers None to

Safety compared in mentioned during the our from quarter XX% sales prior-year. the first press segment Food to As increased the release,

systems, systems hours. his will sanitation the included AOAC, address XX% Listeria as our which In which this highlights Safety AccuPoint various is pathogens comments. sales included August, systems. in foodborne in detects increase for that than products, Other quarter. our independent of XX Media our and such which was the increase in include increased system test Other test test our performance validates an about Advanced Culture This test validated segment Jim our Our of organization highlights of sales in less the products which by an of Food our Right Salmonella, and for time hour. for pathogens include system, test an Listeria which an Now rapid XX% incubation of test sales require

the livestock to industry dairy producers never with positioned and will our and that its producers XXXX, and same margins industry, off segments oversupply companies, trying X% quarter almost about with our using the in and were companies struggle stated sales As changes We've and milk products With select quarter, producers. in on food of breeding to demands importance compared the now animals Neogen than Safety the fourth animal Safety offers first who seen only best Neogen and prices. of Consumers issues. believe services like while who More some as the quarter products protein to pork the consumers. I’d those we in dairy increased time his But to seen general, products struggling you ever daily that oversupply believe, in may many with global in the it biosecurity protein all the to products their follows for are release, tariffs with Animal are as $XXX,XXX may Those of cover important said, the profit for of perfectly than of partner to continued with XXXX. environment low It’s we and previous companies of programs animals meet stop of is products. products, in export the protect This even their compared high-quality, segments the industry perspective. Jim to business the genomic the in products more over proposed which XXXX for dairy with an fourth segment especially first Animal the in or of XXXX. industry animal to million increase do our ever, at for impact quarter investment dealing the the sales to veterinary quarter segment or including have plentiful demanding as about industry, tighten that with XX% sales our then animal to softness turn tariffs. with for These for China the protein Mexico. $X.X

Jim Herbert

working quite exciting. that really are on like some with Thanks, John. share you And I’d the that to of activities I'm

we've of call would this team, our and additional to on more allow integration. has us management I spend should continue what to As several time focusing expanded areas

take exactly it the fast-growing time Ayr, – me have how XXXX start added of our We to Nebraska our years think Lincoln, got what acquisition had lab to to XX at And in Scotland. genomic a to to about XXXX then, in the First, a we of one eight we XX in we operate area exciting and just let genomics lab needed acquisitions needed years ago that also successfully this And through about back knew ago, built quite of we in genomics. we as to point. internally. continued anticipate and took and a talk knew and exactly look that about that would But in we and Australia. or that second that Brazil, kind trying acquisition acquire but then versus develop internally. labs existing to in we led at a technology we years about technologies, ago acquired next capabilities the we GeneSeek time the then This expanded we about to

how refresh So, see that memory happened. on your you – rollout can

our in business took was that Haywood what with in the nice year. together we the months, begun XX% like that bolt [ph], – story a another last integration establishing this that About to acquired you Shanghai, doing $XX.X increased three in back and this could would same we’ve in combined animal it fill on, Acumedia ago, that in million, Media about There’s past the Culture same in a I’d has total have to genomics And and couple over meant the and Within place past quarter. China. revenue knew in that’s the quarter England, operations the quarter, this yet last we thing our during laboratory up chapter US. here years we

two more the actually staked claim XX% months, activities out, better some now to opportunities the Europe opportunity units have Over forward. product providing opportunity us it ago huge XXX operating we Within were that Those quarter to better started for a about separately. same will, or XX% are our operating in an revenues the celebrated now the and weeks good out same And acquired is And this market that The also than do the new some of right businesses little offer a distributors, in a the that business world harmonize all employees. with we’re this are if that for revenues XX past worldwide or that we combination sales move and Glasgow. than operations we Germany, and independent of Europe greater Media these. with Neogen team about getting we as – year to production I as in line. And our we markets technology there, -- of and France, this central the had about own was Culture gaining period last markets spend quarter south from a we market quarter time and credit of in Most of Ayr, anniversary that’s when is greater improved and employees, when year. business in several a the facility first marketing job XX-year was our Netherlands. located the expanded market $XX you for our a through about And a do countries growing. was forward, The whole do to claim we they had business Scotland, We've Neogen dozen look first share with that million of have growing. this UK, Ireland, over has that few ago, business we force but XXX

market gaining share. we’re think I

Our fit looks some new that geography that that good. Ayr the R&D additional to also got from look opportunities Neogen products for particularly are marketplace. Europe European frankly that generating some programs some operate in acquisitions And we’ve within quite Union

desk have to future with at by I over I’ll excited think ever learning middle learning So, my plenty John some and Steve. from that comments, days, to process the to a sign do most turn things, I growth. way, retain it go. of quite and excitement let finding that still the stop sits that and Oh, point perhaps, see can well. still as my hopefully to I'm is says doing the as in as And continuing and that you this

Steve Quinlan

Jim. Thanks,

a were a Brazilian to quarter XXXX which off a the the as resulted and year million As $X.X period real compared got respectively than declined face, Animal first of in lower also start year, were have Mexican the and John reported our the currency ago, sluggish in same which trailed year which the comparative X% we revenues to the revenues peso, ago. prior for segment the XX% as and devaluation Safety indicated, our fiscal winds

a year. fiscal spend components considerations in for prior our with sales adopted incentives to Now, before the our and marketing We've want beginning we year time numbers. expense. customers X, rebates, new revenue into get of discussing cost and variable on accounting as standard June such the standard support, certain recognition of new our historically little marketing sales as in I our financials, and of revenue the We accounted contracts of the

As no make reported that part to reclassifications revenues million, our our change for The from first previously standard, expenses last of cost the prior-year revenues in and year's first is adopting reclassifications contra in by items year's marketing quarter sales we corresponding totaling was and new $X the these on statement. net reclassified from line quarter. in of directly of this year's decreases last work the income those comparable just sales certain or million. $X those income first in operating our to numbers quarter with There reported declined expenses result as

impacted quarter Rogama of lower have have sales the all to are margins resulting of from standard. revenue recast will than of Lab changes Quat-Chem, our revenues genomics units which average. by XX.X%. from gross were at first and the Each gross year's were historical company's mix of margins on Australian these XX.X% the and margins adoption XX-Q last new growth quarter Margins Our strong M, the Corporate-wide, operation. new for details the recognition compared gross

expense, for software. from overall which Other collection with bad operating costs, shipping increased X% by for quarter. economic administrative reversal salaries due first this quarter licensing prior- The grant included X% higher year. increases of X%, rising quarter to rose receivables insurance and the credits, $XXX,XXX caused and of fees and expenses recur and year related the and in and in in to in General the and the operating expenses, reserves expense prior expenses other primarily to equipment not depreciation the debt quarter. expenses increases Our relating sales salaries, personnel-related development did IT health fiscal

services Last declined of first new X% contracted the levels efforts in product had quarter at to higher quarter. expenses development outside R&D that year's first Our related time.

the quarter $XX.X a $XX income to quarter income income was compared $XX.X operating to for decrease and operating quarter, sales, gross operating to Other up $XXX,XXX of million, million. Our was of risen of compared percent prior-year as reals first first Mexican primarily rates XX.X% a in year's expressed the $XXX,XXX and percentage than the year income And cash XX.X% We of the prior-year compared as of just explains in our gains last first Interest quarter currency decline higher recorded Brazilian of last first compared balance quarter. slightly a $XXX,XXX of last marketable quarter the year. $XXX,XXX compares ago. income peso first losses in of in the income have was in million interest in in to first operating revenues. to the the margin income $XXX,XXX of year percent devaluation The related to currency securities and was quarter. as $XXX,XXX

enacted exercise to was and rate in XX.X% first million to first the statutory we rate options. quarter reform additional in first compared this year's in stock year last the tax effective related also last XX% from year. Corporate benefit of quarter the down $XX.X% an quarter, to dropped last December Our quarter gained XX% this $X.X of the tax effect in tax

that in indicated impact And between we the net company turns in to X%, depending the quarter. $X.XX option operations you’ll first tax being a to considered in operations. inventory investments $X.X balances got improvements assets our year We improved of compares an remember it equipment, $XX.X help earnings our of property, our million I've in believe generated intangible the cash goods and our million in and increase the million levels. on Inventory stock activity continued income enhance could effective calls, efficiency from and at automation. net in finished benefit overall income. tax of result will our past in of this We’ve through invested fluctuations particular $X.XX million in this of quarter. This on that $XX.X to each The each If by quarter. company favorably rate quarter price XXXX on our quarter. this We rose number $X.X with primarily work each fiscal with programs to and

sales slightly decreased days revenues, of to generally longer our primarily year-end, in year-end result the balances receivable accounts compared increase at Our to balances. And August take were which XX to at the outstanding compared international XX days average collect. XX

some for turn positive to Now, a start, the off bit prospects for a little although the remain of of we got slow John I’ll about our now back to year. the additional year remainder comments. it

John Adent

Thanks, Steve.

we employed on is be the the to firmly Neogen road. that strategies some but road, we've The As of to we that it viable. numbers where build in to right believe may some today experienced continue have the show, very bumps we’re

been than are portfolio existing personnel of today. and services Our groups never products and stronger they have

two enables Colitag We The Jim the generate animal purity our around of by their sizable have water safety quality component customers consumed make best two potential The under water the acquisition our continue past their a The tests genomic and the we test our us. quickly testing acquisitions we customers ground them to critical in to sequences perfect our for In for say, of genomics help us. decisions ingredients. on that that to safety our other livestock, is and look a fit Genetic our translate we’ve for customers our in raw for used operations. expands of the would the food of It have available services. Services company food bolt operations production. in and the Livestock made existing the labs test will complements even hit It poultry world that water technology to opportunities, once the to to small the months, running as ownership. have for

We continue has under continue will several development acquisitions all active mostly integrate that an businesses to acquisitions. we completed existing currently Since approach program successful. acquired toward XX and have consideration. to But opportunities been we have been due XXXX, This have corporate traditional have now our to our ability our success into the businesses.

that continue the the we to know we’re going to will We with make do sure rules three hard to the after morning we business use check. write what

to must its ourselves; XXXX the our must able move rules and through product we I'm Our direction technology the Neogen’s we the we three access market. cardinal first, and be manufacture second, as are; to about application; excited must understand fiscal have year. we third,

right reach in organizational with and the world We we the continue anywhere have products, where and the be to growing markets our well-positioned to exists. need people strength in

this me have call. questions point Let and stop from those you of the entertain joined at any who

Operator

our Thank Kevin you. Ellich And question from [Operator Craig-Hallum. from Instructions]. is first

Kevin Ellich

I Steve, did growth morning. Good the that? organic if not, you Thanks taking guess, And off with the can you for questions. give you, give number. starting us

Steve Quinlan

did about overall. growth number. not is the It give I organic X%

Kevin Ellich

– and that? you challenges the to have pricing more only I supply fantastic. seeing, have Animal talked of of the pressure you a continued guys Safety are then, see swine? you going guess and that's dairy that kind about and Can you’ve as here us little challenges. pricing Okay, it supply really just give persisted you to John, And bit kind color? And back Is gone

John Adent

Kevin. Sure,

across and because uncertainty. whole protein this of just it’s it’s sector, think I animal the

XX% of for for side, You Mexico. XX% the bumped saw to and you up that China almost tariffs on they saw – pork

things those Now, moving are daily.

are of think I a different uncertainty. people in operating so, lot And

are their healthy. to keep to make sure buy buy safe they they're to they when As always depends on animals to continue products them. going just It you know, and going

as I uncertainty some this as as we of is that is thing So, think eliminated go to get go better on going marketplace forward. the we from

Kevin Ellich

So, it’s see them buy more would to just then? you products? we’ll issue guess, timing a say impossible I figure when of it’s

John Adent

I would. I would.

think as market, I the you it’s as some soon going uncertainty the change. see of to start to around

Kevin Ellich

what as more and that there? the Can I distribution bit a about then, guess And you so in some in channel. also the past, exactly what weakness seeing to us you as give Okay. color you’re talked means

John Adent

an it’s market. think to distributors of I sell into have market. a end general The reflection the

is to end But if little distribution And up, a the as a little so, strengthen market then the soft, bit will that picks channel soft. channel also. tends that be market

Kevin Ellich

Got you.

Okay. sorry to flip That And makes sense. to then, back Steve, you.

out for four-day I really revenue? DSO forward? your going DSO I called to, should sequential And, we what How guess, expect international the is higher sales. guess, So, your –you due increase much greater international

Steve Quinlan

customer. So, just generally, anywhere, get – because it’s could longer It kind internationally, to average. takes it product be XX to end days to two longer on the it’s call it, weeks Kevin, of

the this over So, our quarter XX% is year. up last international were fact revenues

would've So, DSO that to increase. I expected number

think drop back – are, point-in-time But little number numbers a and measurement up international like our they sales It’s that go bit. little the I calculation probably increase will bit. those it'll a a if moves around.

Kevin Ellich

some lastly to acquisition for Great, And you. Jim, then, see activity. great. just Good

of of pipeline. look now? done color You bit Give XX-plus does little deals in last the a How years. Cash on balance the a us continues number it to have guys build. certainly

Jim Herbert

looks It good.

south We’ve than not said any acquiring company, - them. ever about looking since done on – had acquisitions. back XX started them integrating many one the sometimes we’ve I've we easier As And us. go is we’ve times before,

were Some were because others, out comments, some to about what pointed and in prepared John activities. talked able and – bolt-ons, We but bolt to, comments a we a better I as did I time John his on. with – meeting had about spent in with many particularly prospered some side. with times development than minute that’s the we we genomics corporate my our yesterday. have able

we got that And to make a can right that looking a places rebuilding acquisitions we’ve as acquisitions We we we’re intent management out, strong where got clearly of John have we’ve letters dozen teams now. management at And now. half on teams. radar. bolt-on on that the few can are out that Nothing pointed selectively are

going big [indiscernible] and me want blocks don't them. and said, Like And something tie at certainly I about to to to trying was I We’ve together So, from don't to old this doing we’re want bolt to on he be to [indiscernible] we XX% business opportunities. quarter up be think they’d international. we concrete of to to thinking way [indiscernible] – said total two revenues friend came equated of this float. – that. And we’re guilty my some that on seriously going the international pretty looking we’re I it talked

a I – need be for I number company. We’ve money that distribution think of them. but record desire that’s addition businesses, right opportunities the the pushing [indiscernible] the announce got having forward. team [Indiscernible] some I that going a yet, we’ve we record to got in But to got and been that for we’ve do certainly freestanding the us. the have assure We’ve some acquisitions, some might to businesses to can us think at before. to that’s make

Kevin Ellich

Sounds guys. good. Thanks,

John Adent

Thank you, Kevin.

Operator

is from Brian Our question from William Weinstein Blair. next

Andrew Brackmann

wanted these channel. context specifically there comments challenges about on a do this of go is This in on the your market. Brian Thanks. really bit term? to anything the can that And guys. in disruptions overcome back in to little Brackmann is to Maybe actually the the overall Andrew those could morning. short talk Hi, for Neogen I more you

John Adent

Sure, Andrew. Yeah.

grow you about think and absolutely market to we continue opportunities within have can. product customers portfolio think share, to the about think we I existing out market our you our When there. overall the

tremendous we soft, high if we penetration even because growth is don't have the a little market rate. have opportunities So, a

So, on their you're facilities working to end-users. really continue side that I'm the getting and and the pull of and to things to demand we’ve to drive on talking that can we working been lot those about, can out, through of starting things Safety we product are assuming doing do, drive the activities customers, end a And more warehouses means focusing specifically distributors, some try Animal the is help to of pull-through which through we’re and business on our the the to partners year. the

Andrew Brackmann

Thanks, guys. it. Got

John Adent

Thank you, Andrew.

Operator

David C.L. Our next from from Westenberg King. question is

David Westenberg

taking for Thanks Hi. the question.

bit couple us. we Food gross here. questions of So, well we bit Animal Safety see when for a a do Normally, margins see so below little of Operating poorly, Steve a kind Safety were expect of margins kind more improve. do and little to

a on So, little can happened? why give mix you maybe the bit of us would that color shift there and have maybe

Steve Quinlan

Sure, on David. on grew areas In the that most little my where point to groups basis a gross specific the of were out that comments, percentage lower I side. tried bit the margins probably that that have some food a the

your have our Rogama, although would side. strong you're than that on Quat-Chem, food thought the their But question, dead less good, happened. what M businesses, businesses, that’s So, would profile you margins our but they're the just on have Lab are gross

you thought resulted grew side they on most would gross margins growing have. would've in that that like the fact the they not the So,

David Westenberg

recognition Thank on know prior $X standards. quarter accounting the million give have you you but of under should you we and recognition very or roughly just much. the contra than new revenue guidance, less think in revenue, – your you I don't revenue about just this And saw kind seen new would then,

we So, quarter is is QX, see atypical? in maybe, or what QX say, and representative this should this QX of

John Adent

adjust It'll to not see. future what about going giving our telling $X you'll prior what you really quarters really It’s million. we’re be that's by. guidance. that's And No, exactly

million a So, quarter, yes. it’s about $X

David Westenberg

kind and the going that say kind purely of strong, we Neogen or saw Yeah. we is a see you that something right. then thank growth growth On very, of prolonged can modeling. basis. just for helps with there of was this That should very Brazil. be go-forward XX% a And where you trail No, but period question off to very maybe that’s there to optimistic on something seasonal reason be All to is there’s time? much. a

John Adent

in bit picked business, we've a us really multiple seasonality, big the also both, We’ve big then, up some picked work little to of some of up a which will customers continue business. I has good up segments but in We’ve forward. bit toxin on with think that's customers it’s picked customers David. of some sides other business And in Brazil. that going our

So, Brazilian team’s team the of had with the quarters. we’re o and really them happy great Both Mexican growth.

David Westenberg

just then helpful. question That one is last very me. for And

You versus related kind tariffs talked on the you Safety to of through out. work would say, in maybe some in is obviously, kind – dynamics you how the Thank and, outside or US something But you. milk walk exposure so else the disruption the we animal US, understand maybe, Animal side us your tariffs that can the of of can about called there. and just weakness with the protein disruptions

John Adent

Okay. help too Jim, you can me with one this on the poultry.

stat interesting hogs – day. more is I the other I think we the saw what’s the pork side, have on

than more they've they XXXX. records today were since had keeping hogs have ever since We

more of the we great, market. big got more So, And the we’ve is got produce meat but American which a meat. – eat so eat export than we’ve consumer can here, continues supply need we to then, we

little a about there’s on, that know bit Jim can talk poultry. but the I a lot going So, of

So, Jim, can you help me?

Jim Herbert

numbers got don't know what Butterball [indiscernible] you've them. it’s pullets on broiler of you've immediate the drowned really alone how killed. with contact side. And we is would of there of total of four many depend poultry we and something the forward producers. and this, as some produces now major are Carolina States’ headquarters chicken. on remember the like going either. is Again, the if area night. of how largest XX% The on got impact the Turkey going And of One headquarters impact. – producer, things I to pork impact the the last United that's [birds] late production have as been quite North many sizeable sows got long-term we the the world's on What [ph] regular was phone you’ve the

million the headquartered important. are birds. that the of in about look world we X is numbers they that part So, like that The drowned fact

breeder think I many of layers are eggs, to we who going are how be or produce Now, would hatching going those know yet. don't to be flocks

few days think XX During plants. I to the XX they prior meat processing to shuttered that,

out So, still those up are those there that backed somewhere, alive. birds are still

So, to important that's going forward. be going

hogs has the the John States about, produced the side, XX% in hog As North are of United talked total in Carolina. about

chicken we? lagoons we’re heavy from is that’s And production. we’re So, how kill? and holding that did did of back to about to groundwater, the no, done all the part private again pretty coming that sows did on lot One to mostly that a but bigger operations, of many from those hog – the what there the wells. products talking of we country some we all the relies issue what operations those many that’s manure How

they new and allowed California, – to North out stuff a coliforms took Carolina. animals things big of and own testing use that employees, a And to of sure the were real the it of We’ve have folks. – some yesterday, that and we batch some try make acquisition send proud in. was lot asked E. didn't people, we were California that water I us of – our coli that our Our people owned that Colitag some do got out of we

out is acquisition lot going money to of So, make there. what's we a sure of of, We great on off a didn't lot from start. but a that goodwill got

still on seen. egg takes to have machines. eggs fast. be So, pretty don't days XX in an they side, It industry can and to I adjust it’s think put those they The poultry yet hatch the to

still market. they XX get takes can up that So, back go chick it ready to about to day-old days cut and to

quick. pretty that So, adjustment take place can

chickens, able think a we’re the in awful been for So, but I right place. we’ve I North longer-term the it is [indiscernible] issue to than the is Carolina think [indiscernible] I'm proud probably that in bigger area.

were come immediately when that water plant out guys though as they they of smart they Our through. was where just enough they would got – up load of loaded saw disinfectant far our Memphis a this it the coming, and

help down or up to going of can So, disinfectant when the down, water started this to that in go got there is stuff now. go clean we’ve some

both on it. So, sides it’s of nice to be

not, – or but that whether know don't I question your So, answers

David Westenberg

have. enough the now of in of impact Jim. thinking [Florence][ph]? don't this any I I I wasn't isn't I we, of November broke word, as promise. terms more maybe our you, models, my about think – in I quarter-ending anticipate August should Actually, [Florence][ph] or but kind maybe there have one kind of right question actually because guidance Is what should from

Jim Herbert

I don't know takes because it how there’s can don't never that many don't know just depends how on recover, dozen general know. it. them really The how lot want you know. how long business long much we’ve probably It not – a got of drowned do fast animals to It we – recover. there’s a about got depends probably they and want public were shuttered. plants We’ll to to on

good. don't Some Brazil and significant Europe be we’re operates think John our bad quarter -- customers I looks portion I I our am looks of going those Everything to the for says we’re sure. plants Mexico good. seeing are hurt that think world because there,

we’re we that don't cluttered we’re now to enough that have America. too big over not North we’re part by one mark that – of $XXX So, million

little for critical in going So, my it’s weeks not hurt few be don't first a be it's to probably I get the think bit going viewpoint, here, companywide. but from – think we’ll I

John Adent

Yeah. I’d Jim. agree with

think Or then some things, where to that products some shut think and go sell on got to we’ve do for and because there are may about, there’s down customers takes David, puts you where I bit. little that, and be but if we some things going those opportunity maybe back reclaim a right? had we’re

with So, agree I Jim.

have a huge but I as impact. think it don't impact, see it nominal I a could

David Westenberg

Just products. shipping

Thank you And a right. day, much. All very guys. have good Okay.

John Adent

you. Thank

Operator

question from our Springhouse Brian [Operator Gaines Cap. And is next from Instructions].

Brian Gaines

revenue about How the the much of of kind in softness was talked versus call pull with you forward earlier the Hi, protein market? guys. the issues

John Adent

much I five Thanks, Brian. sure how our pull bit excited revenues little is again in it And know to I we really impact. were I'm double not think exactly that a of through. had an years.

– at quarters look animal of don't them? what combined want for you but that, if the to think tell know see kind Steve, safety, can two I the you you I

Steve Quinlan

say, it’s just of larger I I’d some on you to $X distributors. based the if million. say softness maybe me a $X But would with ask number, a guess million

Brian Gaines

$X what million is million effect? $X The was kind pull-forward of to a

Steve Quinlan

Yeah.

John Adent

be. Yeah, it could

but that, it at like We haven't – looked

Brian Gaines

any Have competitive in okay. you Right, Do any see the little a from Do see proteins? competitors? your you change? in the softer change gotten any pressure markets of

John Adent

message, us got really is push they top continuing we up We’ve impact could make portfolios decided we’re who their that are to really. a broad of stacks try there someone Not a to that have right on about good much. And so that competitors change. the out haven't don't seen but we nice if big have our to thing

the and to And proposition that’s much share doing. our to We’ve we’re got operating. grow that. it's message out So, been we’ve our to to base going our continue we’re pretty been doing and customer get way show value

Brian Gaines

area, biggest in soft? market. The kind the market are In animal of competitors who that's your the protein

John Adent

Jim?

Jim Herbert

at any. America. increasing I don't put couple we've side, some in We, pressure however, now. in because had. troubled don't three We’ve not of looking a a players the we biosecurity to rats rodenticides. better or to in you that same area four for competitive all place think live Southeast that I much Coast, are pressure mice had of If got see rodenticides states, and of the there. North got we’ve looked in the the a out Particularly, got lot

changed distributed, happening say have be -- organization product on that’s don't I formidable, It's that’s and in away. lot hands. increase. cleaning – a DuPont but times. once a so, going about of couple And giving three They're what’s think side, and competitors there’s is security disinfectant that’s we side. that anybody the there we no two strong to to not nobody And or the hands

about on sell John get They China know locally got will some strong them market that and sure talk but probably don't on where they games. though don't hands the one the facing is I in can exceptions, with that’s They're our to marketplace, play but on the can you've not – whatever in anyway. two safety, we’re think I'm food in hands. talk folks I they're of what are – in that guys guys in side, stuff, produced pricing – our don't that minor I a more bioMerieux. XM like over regular the there China basis or it, Chinese – the on diagnostic

know. don't a of don't we’re I competitive I think going So, see to lot that pressure.

John Adent

I much make to And think compete agree with and Jim. landscape to that's I we’re there competitors. against We we’re they're out going to money value. been. go point, rational and it’s make money like the Jim's pretty And strong, to trying trying

Jim Herbert

under to on in got talking John They have more the anticipate depends euro. Probably of probably have – of me get We to structure think enough see that’s sterling, this, but under I dollar. don't don't a reducing Europe biggest advantage, cost pound comment selling the structure hearing don't we’re little we’ve euro. it but I cost about – will the They're I producing what any thing what the I'm to I against is you’ll anybody competitor particularly going on don't the we’re prices. might – would numbers it – bit but a not fluctuation. – to the anticipate think euro remind in advantage do where are, And – it have it the currency for and too the the

here or fact, new need calendar thinking something. our about to increases of we In price about going be, be the are I'm where to hearing lots year into noise moving out

Brian Gaines

you situation – like growth of know this of current give that? kind run for Is with guidance, unless a don't Got the good things this a tariffs it. and kind changes good rate? rate organic but I is feel

Steve Quinlan

in disappointed we’re Look, rate this too.

And indicative of that it. we who are. not generally against we but we This what not we us, not We’re worked had of think a about happy do. is couple things this is

Brian Gaines

you. okay. Thank Great,

John Adent

Thanks, Brian.

Operator

from Casey Montgomery. is question Janney next Our Woodring from

Casey Woodring

Paul Hi. you Steve. this Knight. actually assume we rate anticipate for getting the Thanks. to is rate. moving My assume for any this is more tax that for can forward question model benefits about from or tax on quarter? tax Do It’s safe I'm it our

Steve Quinlan

say, depends would I options Casey, in No, the it a on exercises that quarter. particular of all

but that That you So, – quarter our estimated it's people $XXX,XXX there. it when know the $X.XX I availability And million. I I in share It impact this a quarter. and me a exercise are effective to depends of tell to model, in to would $X.XX in that penny is benefit a the that could you tell X% to don't that activity. price rate. quarter per give options in think you all on what options about a depending put on about was quarter vested the I really about stock option the that's difficult be helped? anything company $X.X about for or your and that depends on on

Casey Woodring

Yeah, perfect. Thank you.

Operator

Lakes David is question next Our from from Stratton Review. Great

David Stratton

the morning. a is particular growth for that Good we look by that you product Listeria that to that in seeing Are really is of Thanks the taking lot contributing new underlying Now driven product? growth the question. area? something Right at When segment, in being

John Adent

Yeah.

– ability than do hour so there’s most think time. But enrichment different long been our to that because think I about a probably the rather is hours. if that out you waiting of in an what’s product Listeria new an for is testing there solutions XX

got it, about they're past. platform. and excited really a able customers of it that hadn't in use they kind to ways what us that’s the revolutionary is So, it that so And new used our is in

David Stratton

is organic increasing And to you. be product are then, So, business? that it then this also people new to of customer coming new in there anniversary seeing growth an going Got system? as you or behind faster the is switch

John Adent

where growth see their process, where use can up going we’re customers. learn within organic to see pick uptake. it they new customers And own We’ll a behind it. big We best as that’s to then, coming in utilize

David Stratton

setting. I if you then, And could final and where that’s an right. one one, give on wondering All ThyroKare the update was

about quarter, every we I talk update. something think for looking it’s an just

John Adent

this take Jim one. let I’ll history. the got Jim’s

Jim Herbert

Thank you, John.

completed now because and that I last the the days exact all it’s think or don't dogs little but of have of – to bit to and problem I millions were – for it. dog leader that long any We whatever Fed gone amounts virtually dogs, XXXth lot saved has We XXX have a the it's been a number a of in of market dogs ever that without market preposterous. time.

it got We And we under six permission but on had we, FDA. got review. with for talking to stuff approval XX in an their we’re through They to don't ahead months. filed out product, their and can we market. the didn't has FDA from up to making XX all move. there really and I competitor never trying the do us help – are or XX – take of out that from believe a the us to have to – when days been regular to review really known all got they've there that submitted anywhere approved it And rest get But the our once somebody with going that minutes well, of pushed been of it on they them reading skills. a depends them basis just obviously fast minutes, how been and

year. There’s – other beginning to our that end competitor market can still we my a back I'm before product because everything would things there probably a to them. sure marketplace He at people lot a out So, of the this get we’re have the the can. there. good might think product in doing this agree. to we with We recording. out doing fiscal got of we’re would listens – But back still we some switch I that

David Stratton

right. you for thank update. Well, that All

John Adent

Thanks, David.

Operator

to we’re you here appreciate the remarks. shareholder October I today. want to turn of to like reminder. our A you, meeting back Adent We taking for John. now Thank X I appreciate on you, Thank time. the closing Lansing. call John all would you all I the being in remind quick it. annual having over for call

you opportunity we’d us an that. out join come have to you and So, see for to if love

the about future. excited We’re

look we We’re in about really much, with a you forward having Thank to you call going months. excited John. the three and nice where company's about very

Operator

gentlemen. and participating for disconnect. you Thank That ladies conference. you, and concludes Thank may today's now you you. Thank

Neogen (NEOG) 25 Sep 182019 Q1 Earnings call transcript