NEOG - Earnings call transcript Q4 2020

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Operator

Good day, and welcome to the Neogen Year-End Conference Call. All participants will be in listen-only mode [Operator instructions]. Please note today's event is being recorded. I would now like to turn the conference over to John Adent, CEO of Neogen. Please go ahead.

John Adent

Rocco. you, Thank welcome investors and regular conference quarterly Good analysts. to for and call morning, our Today, on which be year XXst. we'll reporting and XXXX of the fiscal our entire year, ended May the on fourth quarter

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

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

and comments participants morning, questions Financial I'm this live call conference. Officer, But we'd quarter entertain will quarter provide who our business and will segments. this who this anything detail the our Normally perspective prepared the of morning various our performance normal. from joined but provide for we the on was Steve Following to results our year. by conference fourth Chief this use on joined our Quinlan,

ensure to for quarter, worked the team pandemic, food the our safe tirelessly our global COVID-XX and customers During around world. a supply fight the

in December January. and mentioned we moved diversify in chain very quarter we our As call, and third supply quickly to our secure

elimination essential our many total and to who implement all banned twice travel. the social refine and response work from shifts, site began constantly protected of we remotely were nearly virus other and on to emergency plans. daily interoffice travel, March, safety checks, plans protect employees distancing, mask our were temperature split XX% face action operations our the to with business. As week employees response Those shifted of of to and home to measures. immediate We world, spread our meetings the held first up In took our around and team our those stood we

levels protect to changing will people XX% eat to the to in asked instituted let color To have demands on normal. over communication better the dangerous eat. provide breathing a with proud team members better bit a Neogen the Neogen's to It's to that controls industry do the why the by our doing thing, the budget solutions our workforce now's is home. our approximately their of to pandemic. hit continue been realized has outside. extremely time. new through consider to of and financial I'm responded me dedication protect to of the on. as food that customer very disruption they up. we've home We very business, in to time lost our match or have USDA cost regardless still work, challenges According we hard so a constant caused employees from us has But lucky we plenty adjusted our have how so the safely pandemic, in there’s Americans eat this more employee from people but not start We massive not have how ourselves food and these away Neogen hard later to to health. Steve the Many far. and crisis. to operate this gotten pandemic prior spent our unprecedented creative right in Well, we've have People

XX% with time. weeks estimates effects is the away. saw came seen And produced at thrown For empty and close food to that the went to you a U.S. I've grocery eventually most every us store, for you of the confronted in zero time that the percentage of shelves. we're

dramatically reduced they system. prepare meals, consumers their As waste the own the in

right home. meals food the I'll shift This supply preparing eating and sized with chain give has at in disruptions their this were the toward the And for family caused people eating an unprecedented leftovers. Now example.

adjusting to no We production have providing process restaurants good geared commercial and a and to stories of dairy market And want tubs take Once butter Steve XX its and crashed, to Most the supply going that those time. news of its had abruptly heard entire pound but this. is place product. numerous kitchens. than pound sell customers to industry that specializes Its the customer like is delivering tubs in efficiently We've food pound producing tubs. XX company just don't other XX is it's butter.

As adapt Neogen. normal our the new changes so does world to

in and thrive going into you. train to to now and them We’re in the finding allow survive down customers our industries to communicate, being the proactive I'm over assist Steve it for to turn new the future. run ways numbers to to

Steve Quinlan

call everyone All the John. on right, thanks, good today. And morning,

but Part of today. Before on start this that of environment. in John's in and proud the more and up I'd are I things what comes difficult of comes with reporting numbers to from the effort how stepping team in been the we're has across the numbers, keeping going, the we operating like globe comments pride it of unprecedented quarter and the echo an

we forward. not years to new be beginning last administrative able countries as to remotely normal workforce, an we are And shift through our going to issues were couple minimal COVID the the speed home remote XX% non-manufacturing mid and operate. As quickly surviving work relatively infrastructure investment minor a the to made systems thriving The appears as we some other costs. we sales example, just our which initial in and what with off in sent primarily additional and IT significant in of spread March we've paid in in cases, pandemic of employees

and the manufacturing keeping employees needed while folks has product able while in under Earlier results fourth tirelessly the They've safety full of some safe. and and same the The press Our quarter our go. measures have recognition stress remarkably operating $XXX.X that to where critical ago. all which employees Revenues quarter the And and and production embraced got today it of million fourth to the group These jobs deserve a this for and well teams ended we their million quality scarce we did announcing release supply worked to the cases year, were quarter issued chain packaging making the XXst. materials. in source on for our continue to uncertainty were effort. and COVID-XX. May products, done year a compared $XXX.X shipping

a $XX.X last a million $XX.X compared fiscal the per or or fiscal for $XX.X $X.XX was XXXX Full-year year Net net million. or compared revenues full-year, were for million, income year's share to XXXX quarter the share ago. a to or $XXX.X $X.XX share $X.XX a increase $XX.X income million over million fiscal XXXX. $X.XX X% For $XXX.X million for was

million operations. the movements million for We particularly were of pound $X first During of And environment, locations, the our exposure compared quarter impacting and magnitude by toward but been and was a hedge the X% have were Mexican impacted U.S. than negatively less the to moved less where approximately our significant peso international the settled neutral international have And XX% would been the hard, dollar, quarter. have as became a The portion currency also by near-term. fiscal we've continued were reais When against balance Currency we result fourth there the quarter the these a currency especially they moving revenues for Brazilian Euro in currency of respectively. and currency as XX% for full in pre-COVID the controlled. down our were and for the hit a The comparative as outbreaks year but would dollar world, are of back depreciating safety reported. markets move $X.X international a fell quarter, revenues evident it higher markets those in bit towards in less began volatility the a by pandemic moving XXXX, we than into local significantly environment. the around risks. neutral the we've in sheet currencies the than for expect do level,

While operating many the flat, spite our of quarter encouraged up through the quarter in as in and sales of revenues held our many markets and of customers. performance were were we by with for shutdowns difficulties well the the

during base and also first customer team with few extremely a our were make number of number protect these a made to the protect months hard And Our the to we And sure quarter. our connect worked as of to of they our well-supplied. we pandemic during [helped] business. took and employees moves steps said, John

workforce, travel fourth $X brought our U.S. included savings million succession of for throughout approximately in further curtailment notice. or senior business initial immediate reductions number uncertainty we And operating the the temporary meetings most business in approximately of shows this of meals management until pay of expense demand, our These most included the These industry and and to and international a furloughing Given lower costs. related attendance the continued actions hours our at And to discretionary in of reduced entertainment resulted U.S. took and people and similar actions restrict of trade outside travel. organization have obviously, reductions in operations. X% at we've our quarter. back, of the actions level, spending the but the

shortfall to fourth and below of the company plan were And June, disruption match we not quarterly the beginning permanently also react business. at for we XXX-K the lost last and segment and continue quarter our Safety is believe Overall, We closures of full temporary year. year's monitor Food conditions that reflective of the flat the number in the X% margin in suspended revenues the customers temporary and were have on and businesses our accordingly. will of effective

customers. to team the the sales and for allergen increases both include in this of damage while collaborated line Our determining pandemic the sales Safety extended reaching full has been done from has to customers test X% Highlight toxin and has also our product year out kits. information, Food natural base the the

and due and product lower our fairly which year growth Listeria to European our for lower the new at to larger gain sales product year prior and continue were of food for this the pathogen Offsetting $XXX,XXX non-recurring culture market monitors detection product. rose distributor. the media decreased as from Now lower XX% kits our rose our with orders Sales sanitation products demand AccuPoint line, due XX% Our we environment, demand test X% this processing to share end environmental customers, drug residue Right year. at of

we in to to modified end quarter and in expectations integrate I’ve quarters, million products As year. providing and America. customers. force acquisitions the Southern to calls, existing their across world, we million purchased above we of eliminate of revenue these Cone exclusive directly sell for sales are rights with XX area most on European the this continued distributor utilizing the we completed $X.X previous on which our mentioned our contract to Internationally, in of distribution the three the they’ve performed for acquisitions South $X.X in of These our distributors January and

European Italy that markets in our in position materials and raw we distributor position. and growth believe Our manufacturer for operations cost potential enhanced improve our of significant a key our has

business to rose fourth Genomic in for from from the revenues. the a XX% services sales quarter full in the cleaners partially European XX% currency, forensic services the cattle a by X% U.S. the year were third year In the commercial XX% strong beef the and genomics the Our in $XXX,XXX revenue won in a operations a Europe in dollars lab year first receiving fourth. was the and half declined kit with and test Brazilian prior currency for shortfall project increased safety increase Genomic currency year, fourth local increase large further testing and year, to in Revenues our a new the cattle new the cattle customer primarily for up with expecting in in business and in Brazilian the in increased operations And Overall, rose XX% our negative study the quarter. food on declined instruments for shipped orders media as for the sales did in not in increased delayed allergen XX% We Scotland in are genomic the finished quarter, offset products government lower in government disinfectants dollars impact loss for from for of reduction the based Brazil X% as of poultry year and quarter. on the the cultural recur the the in samples in as in devaluation full volume. due X% year. Europe. and earlier for the quarter year. the XX% quarter, were of local and begin for X% current genomics revenues U.S. veterinary

safety in X% year against up distributor our wars Mexican the operations. country, African rose health help our In organizations. with the strong Mexico America. and food revenues our sales market the the in XX% weakness continued business the due disinfectant $X.X quarter Our up to as for sales on sales was vial that in been that quarter for tariff quarter, year most product fever our in markets result diagnostic outbreaks flat and the the equipment for of a year soft food of government disinfectants manufacture XX% pivot of and in we cleaners portfolio, for the year quickly for products we agricultural in sanitizer products, on and of to diagnostic exploded fight closed for personal used pandemic the with uncertainty safety and partially and for to the increases quarter which for and the largest of products protective and demand process increase demand, and year, with to gains as weakness dollars is we local manufacture quarter $X which the in and foods. for which increase of XX% we business Revenues segment, operations revenues uptick spoilage for offset in of equipment, is currency continued by for a up COVID-XX and these and the to insecticide gloves serve particularly sales million Revenues rose the and swine in China across to detect sales safety have bio-security distribute U.S. strong of for the line in were XX% which year Central U.S. for up our able were dollars that surge sanitizers due gowns, group. to X% to million our hand in result this animal testament sales organisms Soleris of led in X% by our

domestic genomic the rose primarily in result animal full-year by growth XX% revenues service the animal companion our Lincoln, revenues market the space, market the and in domestic laboratory For at a into safety X%, porcine service commercial in Nebraska, in the driven of operation strong volume rise market. gains beef increased

in and products. an reduction The at the syringes of due sales and disinfectant uncertainty largest year segment sales a of and our Other gains X% $XXX,XXX efficiencies reduction an and and Australia to the but Gross for products in end Additionally, rose the acquisition compared last continued disinfectants our their cost Biosciences. biosecurity our year, the in Cell in result sales for in sanitizers in business testing XX.X% March also the were on weakness and rise increase gains of wound X% U.S. X% instruments, by related these somewhat in sales were market and share gained XX. products in Safety to gains veterinary primarily user outbreak Animal in the products to care to distributors. needles X% treatment inventory reductions year by opportunistic the increase sheep margins and groups. of offsetting COVID- XX% in reductions Safety water by quarter business aided of COVID-XX these on distributors for animal were in XX% the share swine manufacturing in markets on highlights the increase $XXX,XXX care poultry in aided Food sales Australia, of a Diagnostic Partially

impact basis by forensic point for from lower in to companion a veterinary The XXX to for and the rose These primarily margin point of continues Safety up Meals Overall, Sales down and and year. to due be of trade and shut dramatically. expenses offset expenses due declined market. is somewhat quarter fourth the the ended to operations were kit to business activity travel XX higher growth XX.X% at increases margin all sales on margins our the show on last entertainment stopped XX.X% international segment the identification the X% Safety the and the in been sales as approximately adverse $X.X gross year, marketing Domestic also operations. genomic million services improvement disinfectants business quarter margins full on we operating year. for full related and sales for and breed in the most currency our for time. fourth Animal totaled in global sanitizers and increase the year full flat the X% animals strong has curtailed savings travel in travel in were in basis that of fourth quarter. retail For early sales reduction quarter Food These quarter.

teams expenses Our the service sales, risen full quarter the from contacting $XXX,XXX adjusted spending increases customers XX% the General and via issues, quarter due company's number the year, emails and in the an in were phone a personnel the $XXX,XXX old G&A which up and increase conference, increase price to totaled in for for the year. of technical have engaging of businesses legal customer acquired professional stock and period. legal fashion even to the primary service compensation, for on acquisition stock-based call. each and the drivers are higher has the increase for headcounts, the new due of for activity administrative the and expense were X% costs for and video and full part in and and

with infrastructure solid as pandemic of expense few infrastructure the And related employees earlier depreciation hundreds to expenses as to XX%. that first year months spending costs noted been development of $XX.X the increase $XX.X Increased the we has the from last rock during million for that's year, Additionally, an our in increase investments IT year. an I compared has recognized were and for effectively full home. our $XXX,XXX continue of for to of continues and will for just development growth million of on primarily number Research work launched a million approvals sales, product certifications. new been quarter. in initiatives. in recorded additional quarter million was of which, fiscal the new product Operating recently was next as and that levels products, XX.X% obtain year's sales group the income XX.X% normalize of work or expenditures Spending to one compares to of generation strong 'XX $XX.X Soleris and in the for last to fourth $XX.X the gross at by margins helped a in these fourth

of our the income of million Other the prior compared prior million in result for securities the year, XX.X% million in on was income, income was expect half interest higher income almost year to year. million in sales earn these $X.X of to in balances. XXXX marketable operating year, cash dropped the less have and the we Rates of and and million XX.X% on $XX.X $X the For included sales investments full or in fiscal fixed precipitously to all $XX.X second or securities compared year the the $X.X year.

of year's in exercise rate the to international fourth benefit that's was the for XX.X% the in primarily as our an effective year year, the XX.X% tax end current operations. tax in recorded last compared last related to tax stock increase from effective earned to and was quarter, fourth option related recorded international year. income for And XX.X% lower full Our XX.X%, our and adjustments, we quarter U.S. quarter rate year our

of year. generating and produce acquisitions property equipment fiscal for $XX $XX versus year strong full We $XX and million in continue during $XX flow, cash invested year. from the cash in that the to We about million in million million prior the operations

XXXX in XX% increased about balances inventory or $X Our million. fiscal

second half raw the $X.X the our the their through the to at of on and During time up supplier in domestic resulting shutdowns event a domestically inventory stocking year, in items COVID, increase million operations. in availability materials long the company began critical of lead ensure

have the Additionally, about ensure stock which event is to for in to of operations support a adequate XXXX. of European added Brexit, $X our this million customers scheduled that disorderly currently in our we December European inventory year

year. added We purchased earlier $X.X in with about also businesses of we the inventory the

levels the improving We for of have year business each new target inventory inventory the the set of possible. with turns for goal where units

rose challenging together X,XXX and I number my have of payment said respects XX our closely in as XX But end, balances and of we're receivable days due moved the Fiscal pulled I'm accounts our how been employees disruptions a at for these and Payments many crisis. at the of X% to almost sales year customers, of year Our a by comments, worldwide have last initial balances levels trends. monitoring was XXXX shutdowns outstanding and year. very over worldwide they the to from proud delayed last company. somewhat and our beginning stages this during at

to declaring new victory there as know John enter year. to cautiously XXXX is As this we excited also fiscal forward not as optimistic will indicated, as we're in front adjust John? look we to the certainly we and challenges more we're us normal, of but be many and much there

John Adent

Steve. Thanks,

As our mission today ever. I've said more than matters previously,

agriculture times. accept We're as no supply. well businesses respond assist a of crisis, our there in our for our with when grow to and important and inherent during efforts $XXX we million, the broader to through this to and built fully our internationally, cash available sanitizers the and in of debt, As of investments markets. flow. the cash to COVID-XX expected worst financially times global weather and seeking We've combat fights to civic plentiful even vendor and more food the done Steve understand recovery, outside very are by of economy balance continuing continuing of was best and have making risks traditional the strong than and a mentioned, few Neogen to things these eventual positioned world free threats We safe XXXX responded. crisis disinfectants about

currency we going that times hit impact are be we benefit negatively companies results and currency American to with As headwinds another growth goals. continued critical Where to times ensure with necessary, with materials. suppliers that of again, inputs we going opportunities the we've understand feel am sizable are to chain produce availability extremely require robustness That's from we've proud the raw our of to to outsourced alternative raw and products. Once our or I overseas, of social all how our team a tailwinds. this our well our achieve XXXX and material We business risk is short-term acted positioned long-term secure of unprecedented for the and in whatever and environment. fiscal all about to and holds us. Neogen except reacted that year for prepared our sourced good ability supply our

the products, the to operate beyond. need and lies team what With members, our services pandemic and customers through

then have and many in going demonstrated also I'm to open Rocco? so as adapt it I, quarter. can and up Rocco strength questions Steve for to for to so We this financial he currently back and that it sure last unforeseen to known rapidly throw have the you questions. organizational challenges I'm

Operator

And We ladies gentlemen, will first Instructions]. comes William with question Please now begin our John the ahead. session go Kreger and from Blair. question-and-answer [Operator today

John Kreger

that in that How if are restaurants differences share does the you. to curious grocery the how Food impact talked margin there market to you? about Safety about back go we or 'XX you earlier think Could shift notable big as from institutional that call about out? you differences Thank could within stores. play are issue Just the

John Adent

type. customer round more it's margin, around really not it's John,

where what kind shutdown. quarters have strength very of a that because been disparate a a portion smaller And has few we that of made the customers actually food traditionally have different customers Neogen, of that just was it's very the supply those significant hurdles that couple we our during of highly business up customer last fragmented chains. types service customer So once base

And where so were, have to customer stop here they they didn't had the they number We within forever. smaller we're stop customers material, the look, just sit didn't mean a have base what doesn't see changed last market saw they say, on. But the our producing, three whether on we for a number employees, we're of just the they months, side going four happens. months the raw that significant and it

of type than customer change base. really of same So products what's margin those kind because that's in use just that who us really more different It's the channels. affected services they

John Kreger

more as fiscal Can And is quarter you little you talk the boost move got into year? then durable and your perspective, a control? about next on the bit a From in the the follow-up. infection that sanitizer you

John Adent

it got was to about in Lexington, look, we bump. only Lansing million We actually to were with I Lexington to We number shipping help. and Yes, use manufacturing because the ramped bulk the needed down supply to that our I seen redo. also have had start normal permitting team customers a not had that think of product, going customers like who chain And outside to were credit. $X.X because we're continue give and in it it. able making up proper we mean, we

is, that which cleaners help EPA registered the COVID-XX I that's think that's The on other have and us. exciting products for side, we are going thing nine to disinfectant

to short-term we that bump, think that got is I So long-term. continue plan but to drive our

John Kreger

Swine And and sales. lot fever China, African drove a of sure similar COVID-XX last and a one question I'm about one

does also As it would or expect coming to about momentum you you quarters, think that the sustainable normalize? seem

John Adent

No, I countries a come growing, think and but Swine worldwide. is still especially of is new seen on there. it real African moving say. mean, COVID, fever, John, talking still about Europe. in it's And threat and I I've it's because nobody

So that's going I there. be to still think

world. it's agriculture concerned around right the is everyone ag news. But it think really think very the now COVID overshadowed will the very, segments, markets in tough by I about. And I something be are really,

customers going very, be to make services that and are have just their but So environment, that challenging right a sure it's going high. very they to products they issues we because help biosecurity need keep the to our

Operator

Securities. go next question from Please our comes ahead. Westenberg And today at Guggenheim David

David Westenberg

exposure heard you I there if you cattle robust macro that talk correctly might oversupply Thank Europe, weakness European Does like affect areas, Can all businesses, to less market. I detectable market being you. and about needles? that. of your market? Fibro market your doing Elanco, be terms your are in And Companies a good genomics why Can an out well out like cattle cattle bit called tell then of the also a you calling think U.S.? us with the maybe than little you in in

John Adent

a heard Yes, over to of not the mean, because and it euthanized $XX But talk we losing bad, million are $XX cyclicality about we They it's over about a the get are in the the are up you because lightweight U.S. swine have cattle this producers head. livestock, yet. them XXX,XXX about producers talking euthanized, couldn't where over the market gone quit going saw slaughtered. guys I losing other animals head. I'm X good. swine day hasn't weight it, something were I markets the estimate me animals,

it's yes, very tough So market. a

the which I up make the to right, make think which because you to need even when herd. the holds improve to you're this animals genomics though going the to about animals, within right and to use well, piece breeding decisions you're animals keep

that very well. held So up business has

pig can't what, that try for money, buy he it, it I'm a replace because something where and calf vet more you'd you to going Steve I everything new therefore, and to what using is year think that's our instruments out of of nipper year losing got business guy a business, and know you've whether it's this a puller or may where that's and product get like that's so a that say, a mentioned goods normally year, just or every got I one. just I'm durable a keep another

the that going So has where tough. think goods, I is that and vet were And the the there it's you're business. I seeing don't syringes. or needles still negatively of is to in whether that, think and be thing instruments impacted areas durable kind market that

we've I'm outperformed think I which of, it market. our tough but is competitors, proud a

David Westenberg

So fine. just in genomics can't, give terms if is and to that? of us a quantifying that I the that's mostly I is mean, cattle, exposure way mean, I know there cattle. you to is

John Adent

spread really quickly. poultry is between now genomics David, nice and is we've got very, companion growing and very cattle, a swine

you good with We've Steve that But to over amount, have we think don't really got it. exposure. don't cattle. follow-up business. that don't on I have have of would there, So diversification say the a exposure over an I an exact we I can

David Westenberg

And of I exposure, never quantify market a need. there can going has you or qualify it don't always then if the know it on been to in because again terms end

this the I qualitative Is But just in this a think issue is about this your exposure basis customer food maybe of to for love there we I we just going talk thinking on in this percentage, maybe demand around impossible, eating go versus past. a maybe to mean, percentage longer I forward like if restaurants each or at restaurants terms concentration a to but excess in is restaurants know about last or as home. way way or you to in expected? had at the would large versus mentioned haven't producer? question, you we're piling quantitative see now eating than

John Adent

that on that only that large, can we what goes and know -- certain but can that type they're most on I don't with tub times XX those does customer. I example butter, entities. know gallon a like think because commercial for David, to certain, we No, of dedicated Steve a I we that gave on customers

to don't within a base. because stick? it they to a restaurants, that we make those have that the do So I know make but setting customers ounce they the move that consumer go and that have So the of particular then we But make a single-serving one pieces XX it's customer customer. and today you then mix also like tubs the for pound impact that can

David Westenberg

And last I an in of jump growth how And the was much for back one in this quarter? give maybe I'm the to have few was jump just organic you impact quarter? going or about back And us acquisitions if one. in I'll queue ask maybe just three more, queue, a more. What but in

Steve Quinlan

year. David, was we incremental total million the about of growth and in $X.X organic down acquisitions full it. quarter And we million revenue for revenue million X.X% from $X the $X.X were the for organically. talked from about

David Westenberg

very got but much. in bunch a you queue. back Thank I'll I more, right. All jump

Operator

ahead. Today's Please next Connelly comes Stephens. Instructions] question from [Operator go with Mark

Mark Connelly

situation wonder resolve? the Europe U.S. both the current dairy of you market issues us through you're if of both thinking walk I how in those and could about how and terms

John Adent

we've repeating. of same in kind So U.S. is dairy been the story the

processors kind the about myself. from is shift function anecdotal and went an the lockdown articles I'll You saw Mark, that talked saw in the home, to early about of like I on kind story a because we know when really the that's if wouldn't I've Again, dairy kind on, take. what of the producers you restaurant give milk news with March. pandemic, really you of of dumping don't

And go to kids. So always, order I and don't eat everybody times box, just lot we they're no, the And all else's I'll I when back. of know order in to it like, of want a I we because I send eat to out over lot stuff. only and we're five That's last the have just of system. would box, the watch a it waste it, tremendous times you want half going don't where

many when food it that Well, home right them. out, and even eating about started all out, the stopped the do mean, and eat size. when always when take you I think you're times they people everyone You all that shifted how listening, making eating you and actually leftovers

though system. eating right, demand therefore, even didn't and were efficient, wastage you of wastage was became the the we drop, the more technically amount, and out So same saw system the have because people the

I eating a going kind for continue that to get out. people of think have until we're while we back into to

eating different. again, out is Now

done delivery that well. the and those. across remote the People all GrubHub you have and businesses see Eats Uber I to drive-through think chains, of when restaurant gone look have we and

So you're see starting people to drive to continue that.

our going to the going But comfortable. recovery group. think don't I everyone I that I is you of and know where V-shaped going I be I'd it's to walk to think it's a into said, help. get and anymore. that hamburger handy all I'm would crumbs doing is my hand to the use not and up my people eat the and I I'd I'd get I'd then off down sit to the same gone. take wipe off tell McDonald's be So my days very this and table to

the So, in the alternatives, type still for to whether other markets the I I And coconut, same constant soy almond that European see with of traditional U.S. it's for you supply that's eat milk for erosion things have continue think segmentations. same chain. same the they the

be So going I for to tough think is a dairy while.

Mark Connelly

genetic longevity talk just people how is business? companion that new buy of And product animal you space. I what of a at long-term confident growth But growth was lots a hoping could you think the bit is about that little there are Petco, a it. you this the is? When

John Adent

of And long-term this businesses it one benefited actually I a think COVID-XX. I business. the is is from that growth think

is why don't of a the Husky, going we I offerings dog we that today it new marketplace in there. can in were a want but much think that people that too working And of want your because what's heads the is And saw talk and product got Is for that they home, to grow Mars. to bump But are their to that don't product, a it much half working and on tells be I a systems malamute, partnership more. And driving kind I have product we're competition and that their Banfield, within in up. Spaniel. as to pert, grow we're within one of think is internally And have Taco continue that's we're of network, we internal product we parentage about and my really made from product give that generation have of. offer you it home space. seeing we're next it our too exciting. And own with to VCAs going they BluePearl And pet ownership. the I

Mark Connelly

each meaningful Does Just pretty one customer other? was two your up company. acquisition impact question. just Elanco stacked how the last on have the a a broad list? StandGuard I'm curious next to

John Adent

yet it's we're going hope is seen buy it's now make not technically definitely done. Neogen targeting list I it does, but customers sure because those something be would portfolio. the customer whole the I to haven't to

Operator

And the Securities. with David Westenberg Please Guggenheim next question is go a follow-up from ahead.

David Westenberg

the been? -- a for that excess margin sanitizers, to margin was overall than sense beat out get that business? of the I how just on disinfectants of that have at that was a target me your much just $X.X the you higher want the kind and might from a pointed lift just I'm So and million did

Steve Quinlan

than cleaner David. that higher those the were sales. I margin, was And average It tell would opportunistic disinfectant you

for not I margin think -- they appropriately, not side were the products priced gouging. that But but of were they higher yes, certainly business.

John Adent

And across animal doing their job that tell that team I safety we're whole an businesses. But will done has David, outstanding our goods. you of reducing cost

it. that's can increase need margin negotiate when material are But Now how to you and it's continue at leverage challenging environment, we supply, in constantly and in better right, you size have to short our gross just operating margins. turn get the increase we go scope raw this in to looking and

working that So it's measures place grow it's not line. actively margin that, have just continue we're in and to gross to

David Westenberg

the supply, to And of June what about that then little the the other food in being to I've getting a From they are macro. involved talk in an back supply. bit been improvement food talking companies

impacts any did from improvement quarter not have this in Now June.

If the mean a think from in you food help quarter, been I be us and to do were but Just on kind have positive kind of of about there to June? you short-term, a would next kind to impact this. traditional quarter, have don't of producers confirm that can model I

John Adent

Well, need market set middle internal said, an as this. system are cautiously around think in look, that the going we're in I standpoint, and in the end recognize like to it world we dead But people see stages. This is operating is different think from something we to I not go the Steve of optimistic. is away what COVID

in employees with, if deep So reinfection to that quarantine a that those employees, came period, am positive, company. sending proud a doing has an of the the of impact the the productivity needs. clean at that customer any not I have rate manufacture we test quarantining everyone business and you home your contact on for having the meet environment extremely to had and ability have they

it is test all and all control, did it around and someone struggle dealing we world, were in quarantine are constant anybody a these if types isolate, able incidents to But to outside. locations in didn't positive time Neogen And that continue reinfect we're environments. to operate of was the the those with clean So else. that it at

to lose to shutdown and brought they somebody's were suite exposed in we suite. went a have birthday you party If COVID whole and the because somebody and

suite. whole the shutdown to have We

deep just try have but to send we to clean to don't excess have step workers everybody We laying up, in around. and and home, we get manpower other come

to So it first the for environment challenging like I'm second unclear the people an from this look I standpoint. fall as is wave. is to is still what operating are going operating be me, extremely This mean, will asking wave? a while. an

are note, of we the I So think yours. right? was everybody it what down XX, doing for we Dave, So I'm than what we're I quarter. market that. were said, down It was focusing a and else, one saw on better is proud

going I We think to the we're outperform control That's to doing. what team outperformed the can't we're is continue everybody else. general to But market. do. what the market going

David Westenberg

might for expectations and of Raptor market in healthy. then kind can be lift you tougher basically your delay what do I'm maybe in bit for you impacts is product products expectations in said terms that's launches add than a in just -- product a good Listeria. any I'm And in employees even year? segue, markets. of in market the to Can new or have from new commentary winning of that regular next from talk this just trying products you because maybe you been keeping And a new recently like kind about launched, maybe little you your maybe share then a

commentary can to would grow year So be use how helpful? products on you any these maybe the just in next new

John Adent

thing in done I is is this little virtually. because has But how the to launch. challenging it, of quantify bit and go a right? product more them not facility I show do It adoption to their new environment your the you be We're Yes, delayed and of them help second think, rapid David, getting can't to technology in half think right.

not more but So little a impossible, it's bit it's cumbersome.

we fantastic all I Soleris be is will mean, forecast I So our before rates traditionally initial think initial forecast, we equipment. next-gen sold you coming. what that new than slower we've piece adoption great do even a the launched. units I have of tell some from we could our seen. things But from

upset really they back So went before great they sales product but even order launched happy. team on really Operations is that's news. the because is

guys coming quarter, see. coming we another about, successful, to month the long-term. this we're short-term think grow going we've think are are next off products things got And and have significant other of us year I you and new that, We that that really excited we've line helping number launch this to got really coming a going be

Operator

question-and-answer session. the over to concludes any I'd This final remarks. team for everyone. thanks to And like management the turn back the conference

John Adent

just I again to Thanks, joining thank want Rocco. everyone for us today.

acted really Again, As of to on safe and same type the keeping business way in continuing about, team customers we're and the we we're quarter. safe. the talked the help business our drive proud us reacted We're continue focusing to to and of use forward. the thought that planning proactive process

safe, we're And washing just that. of wear your hands. keep think all I your mask I you and doing stay face to would encourage

So, thank today. us for you joining

Operator

Thank thank all This attending today's today's concludes you, for sir conference. presentation. and you

day. a lines You may wonderful now disconnect have your and

Neogen (NEOG) 21 Jul 202020 Q4 Earnings call transcript