NEOG - Earnings call transcript Q4 2021

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Operator

Good day and welcome to the Neogen Fiscal Year 2021 Year-End Earnings Results Conference call. All participants will be in a listen-only mode. [Operator Instructions] I would now like to turn the conference over to John Adent, President and Chief Executive Officer. Please go ahead, sir.

John Adent

Thank you, Chuck. welcome analysts. regular and for conference everyone and investors morning to quarterly our call Good be on XX. we'll fiscal Today, reporting year, full and which XXXX our ended May our fourth quarter

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

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

this who prepared Officer, morning, Following comments morning the provide questions will we our this from Chief and on the Steve quarter entertain for Financial our I'm year. results Quinlan, our will by detail joined conference attendees.

of in remain lockdowns any Latin we're to issue. our the normal, monitoring see like, to some community not been has that's to our relief a affect. are We dedication we serving new comes look is a recognize Europe ready And wavered. spread of and the eagerly global to continually due States, and global is as particularly global COVID-XX rollout Well, going await to America, for the stand year this pandemic going United company, whatever While vigilant, vaccinations, we that whatever we and any way. variance our challenging, our beginning the

the our business. role food recognize line to food press supply our grew we to global appropriate people, connect face-to-face, took growth, in supply. and for our with conduct our of food our launched we potential quarter, our to focused remaining in year a results. detect customers, than to and this providing The as growth allergen food on fourth animal like reporting mentioned we're record possible. XX% business. COVID-XX global to some in in XXXX the markets, of of I'm the innovate as few And continued test lead lows innovate what's We As a steps our our ensure people, top our we safe our We safe, further food will a categories pleased our remain connected major I on the products the Furthermore, in breakthrough protecting and in finished in product customers networks with safety morning, as we keeping remain important especially to during globe this across focused and customers pandemic. was animals, minutes. on the play And elaborate travel it across fiscal continuing to members protect an that our release although leader inability report of the areas a as solutions have making easier teams hazards the of Despite it been pandemic. of business, the began fiscal Neogen prior over a very proud to food see and kits from with ever increase products challenging year that areas global we year, are team physically their year, business key much to all strong our rebound our helped new new and extremely supply

year, than Soleris the growth over year. equipment and sales double cannabis us it the microbial system, to on evaluates XXXX, mentioned in nutraceutical, July on to which spoil again. we last beverage, bringing customers safety food our expand cosmetics, fourth industries, quarter calls, want know, launched This past but and You alone, provides we helping on NG mission. of I detection the next system more in Soleris the do quality I've food, generation In XX% activity to saw diagnostic of

in Soleris addition as relaunched after and we that we ThyroKare gained were sales very market off In share recently nicely leaving hyperthyroidism our have canine to XXXX. taken supplement NG,

very continued of of their fourth existing in which nutrition Our Animal both wrapped XX%, in across with our dozens the kits up segments, Megazyme the dietary full year. we've us going the of are acquisition company two Megazyme's Food integrate segment, strong with growth as the have meet help for fiber, our strength used We and business. in more of needs a increased December customers. and to I'm little expertise showcasing This on over acids in segments, assay the all our and performance lactose. polysaccharides and to our Safety sales now more to allowed our especially to world, elaborate and acquisition revenue increases food industries solutions year. the stretching and double-digit our reagents quality challenging to the turn a Food more XXXX offer all fiscal to Steve and to in into quarter bit as measure quarter, Safety our it diagnostic sugars such products incredibly added has turn continued year of portfolio, in in across

Steve Quinlan

and thanks, everyone call on John morning the today. to Well, good

team quarter start challenges. I with outstanding It was job entire pandemic, the difficult proud we're did very pulled year reporting through are how echo Before John's to we an together numbers, on of the comments to a on like I'd and our working just but due the today. the

XX%. for the $XXX.X million increased an our a we results press and quarter are experiencing year, today, team with issued challenges. working back business getting some operating Revenues seeing of have to our fourth restrictions, working we're increase Earlier still individuals shortages. May not of through XXst. ended workforce the to many starting these loosening are up, we're a quarter to supply and and chain in announcing compared as travel, full ago, the release, normal fourth We towards their While and were our adverse is million and of quarter $XXX.X effects remotely sales on conditions. year yet that's some we're markets same opening But which

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

the impact and reflect fourth we adjusted split we news in of remember announced and the You'll currency, quarter, several amounts some currencies good have a against from quarters peso, this. in two-for-one effective particular, and Xth, pound June been stock per the these negative several had to as share dollar. After strengthened

our $X.X million the in been for revenues neutral were higher would they quarter a than result, As comparative a have environment. currency

negative offset -- currency December of July, half the acquisition product of for headwinds currency of this only a from full to XXth in also extent, XXth our StandGuard Ireland-based first our Now the resulting a benefited the on fiscal year XXXX revenue we In acquisition Megazyme lesser our the line. impact and for year. the quarter, of $XX,XXX XXXX fourth net July

in these Food the revenues organic in in Excluding XX% for for year. acquisitions, year. increased our the segment X% and sales grew the the fourth quarter the XX% and fourth Safety XX% Overall, quarter

was such Soleris restrictions for were the line around our conditions Food the we markets include many several operations, our year, an growth the and our forced fourth X% that XXXX. international in several Food was Safety our microbial countries product half same-store the Brazil. struggled and the Safety driven in in product instrument shutdowns segment the capacity testing, with was but general operations XX% Megazyme year. and as first for impressive acquisition business in full line yeast eliminated, exceeded sales acquisitions of such by NG in are at COVID for quarter and in distributors sales next-generation some has as of core year, still last have India Soleris by John as of many of have lines, XX% fiscal we fiscal as the We've talking up about, our globe. months, Excluding customers expectations Highlights This and adverse In a in of strong product XXXX, in the increase or pick into several sales which seen were reduce disrupted their which that the in the mold.

for sales of while Additional placements in sales the used test higher consumables X%, of of allergen resulted Sales testing. our increased rose instrument ongoing also of our X%. this kits test kits toxin natural

for year, was because In line Our recently environment, business AccuPoint line product fiscal their the about this down. food line, volumes year, increased which for reader monitors lower environmental flat We purchase for was sanitation quarter, many its and a in XX%. excited earlier launched new product customers this XX. are fourth the as potential and processing the

product Now its continued Right increasing Listeria growth steady XX%. Our

to X%, manufacturer. domestic grew ordering offset of products a manufacturer a customers Media vaccine -- new While some our Culture a number lower business from large as

Internationally, residue sales during has line product up We after stronger continue our sales with we to as this to growth fiscal hurt in face calls adverse distribution conditions ended operate in related dollar. U.K. COVID countries were in a the distributor. throughout compared in. challenges of increased with sales the European we some coming our exclusive drug in ability decline agreement Sales in-person year our XX%, those our and the of Continuing despite most most convert COVID customers to make XX%, pound XXXX inability the to XX% of from with

by issues as increased corn, pick way. customer. allergen After and genomic forensic a by also the primarily increase the pounds Plate fight XX% kits to high the lockdowns, bovine Safety services as leading Our solution for our sales country sales X%. the sales relating from are business for market testing outbreak disinfectants, One -- in in up additional as a XX% Brazilian to to and Safety in continues for with the media from with micro which us to One of and dollar growth African well competitor our listeria increase, to X% aflatoxin U.S. led was Higher in and a government Food operations that contributed their first in sales a test COVID-XX, hand revenues allowed swine led quarter. COVID salmonella of in was increase detect fever to for Brazilian test due and increase starting was sales as workflow strong cleaners quarter, of to China real. Broth increased increase, Food to in difficult supply sanitizers related our culture U.K. kit The large Revenues quarter the resulting year

peso. sales year. of increased the Sales X% currency, devalued X% dollars in at strengthening year, sales and for test year, U.S. increases that those XX% to fourth dollar, in in real quarter partially of offset to and For full as in the to the converted in Brazil first this gloves half local our were significantly Broad-based abnormally by the diagnostic when strong operations high pesos. And increased this as a were products quarter last U.S. Mexican especially converted were in which of lower XX% early in increase but the demand in pandemic. the dollars our against decreased in due kits the cleaners disinfectants,

had continued and sales increases with than fourth in operation dollars in swine more COVID-XX and of outbreaks the China revenues help year and quarter that year, and of both fever cleaners country. doubling to a from Our for disinfectants full fighting great against African U.S. periods

also markets. and had bovine swine China to higher in business Genomics the sales Our

Revenues segment struggling for quarter While Safety producers fever swine seen the XX% the still as pork increased the have stocks. testing industry for year. outbreak, African the and for we've full XX% their rebuilt the rose Animal from animal is

gloves, impressive and this for products disinfectant is demand those results fourth year's the products as personal early in protective million a considering included of sales So, in equipment, especially increase as quarter such sanitizers, pandemic. last exploded $X.X

caught demand of sales most As experience, and supply from you those fell up off. personal last summer know opportunistic to

companion back injectables, down antibiotics Additionally, by with and to and XX%, the animals, this in on The small increase products. distributed spending animal increase these in orders driven supplements care protective the were Animal such was during pandemic. Safety especially business year as animal cats our pre-COVID wear an on for due vitamin dogs broad-based up revenues products, year

for which or product the increased U.S. in Veterinary later expectations thyroid syringes needles just the high in year. ThyroKare, we XXXX. pressure increased sales and due significant as XX% fiscal to replacement excitement, in its and year, XX%, such throughout rodent first Our the produced rodenticides introduced instruments, quarter strong much with

Cleaner companion and also from for products an manufacturer down StandGuard quarter treatment products was sales Our prior year and Nebraska Revenues notable product XXXX water dairy fiscal of the in these insecticide of supplies of the million Lincoln, of distributed quarter, after growth, sold XX%, was of sales sanitizing of in in as sales last pet adoptions were a during Partially offsetting with agreement of service XXXX. year our our which operations. line the fourth decline July. as the disinfected offered the June, animal from sales the we termination the $X.X segment fourth dollar a of with lower first to in products opportunistic off more in retail of XX% increasing benefit increased continued acquisition sales due past XX% the U.S. our COVID and equipment. this in Genomics line to increased the large result significantly quarter fell grow, dairy lab through at

bovine sales We also sales beef a and companies. dairy associations XX% from in higher AI to benefited from increase

the reasons listed, market for by test a new a XX% increased for in Lincoln with customer in driven earlier in a year, and the revenues large new increases year, full partnership aquaculture shrimp. the the additional For just with

Our quarter XX% business for XX% for year. Australia and rose in the the

in Now organic country. growth growth is exclude our new which was product a to full for safety distributor end fiscal of our that impressive an portfolio But our that added XXXX portion from February, we acquisition XX%. if a XXXX, still year sales, of at those the of food

Our to as the with exceeded the increases products basis, chain worldwide in and XX% to were in Gross Food Australians than animal XX% year. gains. posting team margins a of the continued up the were fourth increased quarter pandemic, also doubled, recorded increase XX% last impressive our market. ownership recorded revenues and the the year, because personal Genomics XX.X% sales Safety lab the revenues we large Sales full pet and tests On costs. companion expectations during more for related in a flocked and XX.X% Genomics quarter beef to for supply compared we

million in XXX as in to outstrips Food the in of cleaners China. stages such the early important and sales the The and of to the protective far the of in XX.X% higher note sanitizers as hand it's gross in pandemic disinfectants caused gross decline our part a basis that year is of prior segment due Safety driven by period, decrease think current gloves by fourth I quarter the $X.X supply. for COVID in as point lower was higher margins margin sales year that in the products, products demand quarter in such those margin wear opportunistic

International also expenses and sea scrap precipitously larger purchasing orders, significantly increase the due We and of We as in higher personnel costs operations fourth less our quarter, contracted increases. and in delays resulting supply experienced the for to business costs labor result consolidation across to and both increases air rate while our pandemic. on related freight to including instruments commercial an are lower due conditions and steps rose, them, costs pandemic postponed during rose passing procedures both had health shortages. volume higher, the again, orders taking Safety and persist launched potentially newly from by we These freighting quarter the insurance freight outside and in phase during higher also rates port the increased fewer rates changing frequently, supply address drove constraints driven the modes Food do the of airliners to flying increased of also initial costs electric the year. for services

quarter prior margins management furloughs, no the year's were difficult freeze a comparison senior quarter. year some from up travel in and is quarter at XX.X% expenses reductions, since million This salary $X for for in X% spending protect measures the such reduce hours Overall, eliminate staff that we the or These due to proactive of year actions were full full took had year. For and business-related the also gross year and the fourth prior impact. a the business COVID to the expense uncertainty year. XX% last fourth the time, approximately XX.X% operating for as of fourth

still customers sales the with teams interaction travel, certain while to pre-COVID world at we're in started areas face-to-face again we're have levels -- few of months. of past not our have Now the in

consulting, the expenses fiscal X% for $X offset full for on the other General legal both administrative a and with which were XX% meals successful XXXX, salaries activity sales million $X.X X% million quarter in and expenses and year. expense the result, in we but year. in in decrease targeted in revenue year. and line Earlier spent spending for by quarter, in rose Increases to ultimately acquiring. XX% fourth As marketing increased full full commissions acquisition and professional for business, the were only fees the related not growth a on and travel shipping and for we

for The Chief the amortization amortization increase. months increase including was That of of was positions, the contributed XXXX. resulting XX% almost including expenses, five senior and the General this costs, of for are year's incremental $X fiscal last added these G&A prior of from headcount, IT levels acquisition were to acquisitions of where which Research we Commercial management in Increases development recent investment in added and quarter quarter. expenses in Megazyme costs, the fiscal fourth number an Excluding increase a quarter. $X.X higher our a XXXX million X%. the also million non-cash, and for Officer, category to Counsel

For of the to $XXX,XXX a XX% $XX.X XXXX R&D acquisition year has the full increase. about increased contributed R&D million. to which Megazyme, small expense The team, fiscal

due XXXX fiscal X.X% sales, partners increases launched in the and percent included outside develop gross in new prior category margin million was X% this in we higher readers up reduction and percentage for spend the previously fourth quarter the of discussed Other quarter was $XX.X increase which and spending years. services the approvals. in with expenses. to salaries, a income R&D Operating and prior over in expense current operating year As at to on both contracted product the

year, was in operating compared to $XX.X $XX.X prior income million XX.X% or or year. For full our million the sales the of of sales XX.X%

operating increase Our a fiscal income XX% represented XXXX. XXXX over

the million acquisition on a been spend over sales our opportunities, Excluding would would XX% $X.X been and income operating our increase XXXX. have have of XX.X%

This labor have in in area, our due experienced I operating a $X.X and compared million due $X.X in given for the proud to higher throughout room income efforts very million Other million prior that of year. XXXX was despite our income we're challenges supply know having is chain balances performance, the particularly improvement precipitous we reduction for and John on year to significant this securities portfolio year. the $X.X pandemic marketable economy and considering year, Federal to we've the drop While of stimulate pandemic. the from yields the in in the past U.S. to drop resulting cash a interest during the Reserve plenty

tax fourth fourth rate XX.X%. year's recorded effective for last XX.X% was Our compares the in quarter quarter. This to

rules year paid tax by countries at year, the benefit year, in the international increase higher in a with was we from the For under current full effective despite in XX.X% we in increased international that The fiscal tax newer more exercise also the higher our from U.S. year. this XXXX as in the options stock operations, and rates, had of some XX.X% higher effective profitability tax the rate operations. profitability to rate the driven tax for

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

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

balances year-end. our prior inventory flat the acquisition, compared Megazyme acquired from the Excluding inventory to were

Brexit been in delivery As is challenges continue in levels pandemic the supply and available end from to order customers. areas to resulting issues January, the transition in we've chain some ensure forced inventory weather for to both product increase we product and

this Accounts last need is increase quarter operations focus Our year levels higher our over well the balance X% sales to year-end of year. rose compared team with balance in by levels overall the on have continued the receivable down. to done and that fourth to primarily that last period keeping inventory due same a

XX XXst, XX the the our days Our due uncertainty past efforts focused an day their not in at team May of And year improved the debt seen This days the compared sales year And to ago. team to performance a outstanding just write-offs And extraordinary pleased pandemic. was to through. XXXX collections has we've I we've bad believe to year in or the report of gone appreciable in I'm that interest outstanding, as bankruptcies. the Brexit. was obstacles all through lockdowns X,XXX spending our in they've number COVID shortages, acquisitions. labor chain and invest development supply I during looking us put than could of worldwide way new on and potential very difficult issues, handled XXXX not new launching from conditions, continue quarantines, our front we prouder In to future year. through of fiscal and at a be growth, we opportunities fought how the and products, employees in economic more of

So, portfolio build us and to will the our as this infrastructure growth. to product allow continue accelerate we

world, our Going XXXX, open across of but the magnitude as growth fiscal be selling sufficient expenses growth. will markets will projected disproportionately, believe increase cover our the into that revenue to and up travel we our

look John's forward there's to As much to in fiscal indicated XXXX.

momentum for tremendous optimistic the are have John? Year the New year and ahead. going into excited and We

John Adent

impacts on the and about forward. of Like different for recognize the so we're all have talked inbound quarter been with Steve world, year. been and we're been lot to pandemic. seen actions this and that the those a this, numbers costs has pandemic There's unusual on right. year an And Steve's outbound supply many been and and increased dealing to Neogen. both curb freight chain our help the of that mentioned Steve this going costs, some dealing we effects managing those variables the earnings the in our affecting tremendously, year. margin we've Steve. effects issues actively others cases with but our Thanks has Neogen around tripling. And the what taking we've due

entering those lot the back Comparing into in the going fourth went more. lockdown but talking business. control. it's think about pandemic to this would we some as were quarter we how this get was detail, world unsure time, year's through last difficult. at I our year So, our the we of last confident. to a impact just is a worth In performance feel were pretty just and We're Steve -- global

and million all Steve of around So, management. our implemented world We nearly of talked cost-saving year. saved that over quarter of we find our really sales a of of quickly approximate number business U.S. support -- reduced cost-saving travel pay to hours about, discretionary as us then spending furlough the and We aggressive We $X.X with measures. workforce. $X We in in to facilities senior sanitizers, last eliminated cut gloves, the of and of the X% the disinfectants or million. opportunities reduce staff and customers we opportunistic halted protecting

We've seen fully July, forward Now our that a carrying -- and we're teams. variables. to Megazyme marketing regarding customers solutions. from handle these year. said, excitement And our going This new the feel move into into look we tremendous sales being to offered and new the be offering we these Megazyme. products optimistic and to the excitement these business we already into as well-prepared about I'm And that by marketplace U.S. amount integrating extremely of the

to Neogen Super Demand Expo increase seeing -- as products Viroxide -- next domestically the bounce expecting move on a June. We're fiscal the with seeing We as launched biosecurity and strong the industry approval it racetracks. are Safety and we into Pork U.S. strength care products. segment and I continues distribution look to forward COVID-XX toxicology in fiscal instruments, continued shutdowns veterinary samples be year. to animal U.S. workplaces strong segment year our for recovery of growth we the products, World Animal then had across forensic this received to the of for control we rodent and at Our after the sampling the XXXX, beginning as expecting and back EPA

us sustainable growth about for genomic We've in aquatic decisions the open with and We're a genetic also On work we offering Technologies, customers. field seen really markets more the to sector. for with Center Genomics help to worldwide farming. make to of for the new services our the doors and of reaching excited new the be breeding partnership in Aquaculture our continue improvement to continues leader we've announced to aquatic informed continues ensure seen which breeders, Our companion species, June strong. grow, expansion agriculture XXth, animal

canine common remains test, sales none of by Kennel most United Australia. product, and the our Steve Our the parentage doubled Club and in more the in States test as used than American mentioned, that

throughout we offering last risk In diet in has to results, began the like precise Igenity Analytics, monitoring automation for can food they our new and we and NG customer environmental well elevating placements or will We been visibility healthcare In companies of continue fiscal this be fastest, user-friendly XXXX. -- and implement new confident market Neogen we make within have on strong risk tremendous and feel see food Software-as-a-Service. number AccuPoint technologies potential sanitation demand informed food, and Canine beverage ATP systems NG the opportunity innovative in AccuPoint to concerns. testing May, standards. monitor quadrupled The the testing to program the bill data. XXXX. which innovation the where The a new new management fiscal Analytics business safety new gain -- more Wellness and users we we reducing service the in This test easy that QX, the screen ANSR which and system, increase redesigned with continue offering food of safety industries is compatible monitoring for solutions of also launched and the test, to most Neogen new system of predisposed launched year the December so most systems This our risk food we'll year delivers exercise, comprehensive We recommendations veterinarians. and and XXXX. is health screen can factors sites as as for possible acceptance using our

giving our for safer. safe Steve. challenging growing to jobs approval our Neogen Mold a and year customer doing leading through cannabis, grow I test service Soleris a on was agree cannabis AOAC options to received market recently I very share tackle to also use new industry, head they were our food potentially products Yeah, Yeast to make able provide the supply by how offering allowing their solution global team secure members with it valuable us and microorganisms. for in harmful the to and acquisitions, We for from and of and easier continuing very Direct our proud and

Our in job changing momentum has adapting positive entire the next fiscal give order team this us business and a the hard into great to working done landscape going year. to of

several to for will our people a about. customers the that strong We am service year. questions animals I'll care excited product preparing continued new fiscal any about you help really and XXXX have I up protect our expect they open have. now offerings launch growth it and and that may

Operator

Guggenheim session. And from We with the will now Please question first David go ahead. [Operator Westenberg Instructions] Securities. the will come begin question-and-answer

David Westenberg

and salaries was and terms Hi. I'm color the the -- happy year. congrats to everyone on their a great for helpful of Thank very question their you margin, a in that hear taking all good lot commentary got of the gets And and back. appreciate

might've go-forward the and gross year on So, because year next, ballpark the in when And quantify you guess just there's way of -- of then year, shipping that and of this lot about obviously they're traditionally this still kind year quarter some on roll off? some of maybe can you margins this costs, it? expecting a for like gross to the been shipping the the kind a in year, sales, had it company margin be funkiness XX-ish like think the that Neogen in to a is, the then occurred opportunistic think is I costs. And I whether last the prior

John Adent

follow-up Dave, I'll directly -- comment on all Yeah. will shipping comment Steve Dave let the then let on right. I and with let shipping I'll the rest. -- Steve that's I'll

Steve Quinlan

XX% what -- to in forward, think was that as about, question impact you're That us. fourth probably say would on see quarter, then And I right. profile going David, increase. incremental we about than freight probably that the on margin more about going our I was Yeah. is the the volume your $XXX,XXX the

I think a know, product you rolls on for out depends and just how lot and achievable it obviously of mix XXXX going. and an that target that's as

about talk in to for read what into the terms see All continue people imbalances next asked freight reports year. that also and going we that are we the You of are supply demand we XXXX. freight to

So add. know, I to more have John, you don’t

John Adent

loads, Yeah. container the to things loads, more we're make also about I some costs that of doing at coming full we're right, truck We're mentioned planning, it, at doing Steve be ways looking these efficient. And are can going we're through. that we sure full think, is -- looking David,

price coming them. costs to we they're through, these expecting so So, disappoint know customers our are increases want don't and

not is you're that that that within of that see improve opportunity And So, I margins know baseline at agree to we'll And think, Steve, looking opportunity right? some the going happened upside I year, and so, an see way. there. for unrealistic to there's that you're with we us

David Westenberg

And customers Brazil, Perfect. I in cyber you but on done due shutdown and quick on one the impact do a that maybe anything, one of quick a in to if lot did JBS just just doesn't attack the wondering that have plant -- you? that customer have one -- might've realize anything. then any

John Adent

commercial two I the David, fever swine others. Germany all across that herd something material nothing I'm was thing African mean, it's to a us. cases watch I mean, came for confirmed more, is the watching last week. really of in and It out --

I be could impact. think bigger that much a

continue to So, on and opportunistic sales the gap, we'll opportunities that's a last find fill this but Steve find ways we did the for -- and we what's because new that mentioned, world way I as to look year around to we going do. what think, year,

David Westenberg

Got it. And back hopping in one just before more queue. I'll ask

guessing of the is at if or talk you answer little Just And if value have acquisition go might us a international them to and after hop maybe Animal in in you that. how I'm Safety, queue growth looking give rank it framework can and that'd at everything, or could be kind forward, domestic? but priorities be looking a back I'll versus order you bit of you if Food about And more terms you're or great.

John Adent

polysaccharide, identified business, really on are way type mean, customer be our is for On us it's No. want food of Yeah. free, And good those expansion consumers? box. very talking more free. it's think same that the evaluate it increase I And -- fiber much Megazyme allows the like that. markets a about for really think not a food example great feel got we of we're how in because products and to about we does And it We've allergen how mean, analytics. and on we've it's other we and important it's ancillary side, fit the about what excellent It's our free. customer. consumer for that safety. fit our we're to plan measurements -- a same but true side the the about our gluten talking very has, markets are you other wouldn't other side, and is it that Megazyme, it think to many gives pipeline a I nice it one So, -- we dietary consider the are package business. It's is well, any I I that to acquisitions. us important a

underrepresented think want then So, be we're of we've markets to I we in, job regions done nice the and really looking because at a some the we be in regions. to in want

is to great We have lot continue example. I think And a grow. opportunity of worldwide to a Australia

Safety a at business -- we just our there. we doing man, Animal great added distributor. what added we the we they're look look Food and bought And four brought we then You years And growing in Safety at is Genomics business did products like Australia in crazy the that ago when and job.

So, that that we see model. We model. like

and we going two areas it we're bigger And our and I team Animal look we've Safety had is, when equally key that think those talked to I Safety Genomics. are we as and priorities Food second. that and accretive what really say, if growth then think about look are and a markets, growth Food first, when our our three Safety I preference around at Genomics and we at businesses, had our

want Safety, that's I Within growing increase our than to exposure in because the production. faster the Animal companion,

we double-digit. shown this Now they're All right? businesses all as year, the grew great businesses

all they're businesses. So great

child. So, it’s kind favorite like picking of your

You those sometimes don't it talk to about do in behind ever public, doors. but you it have

of we're would our look focus. that's is. So, that's at I We kind all the in, where but love say what we businesses

David Westenberg

you. Thank

Operator

ahead. from Please William The with Kreger John come next Blair. question go will

John Kreger

-- supply John, just talked and priorities started? you I give when goals could official example, the about and bit? you key maybe don't thanks. just ease about you headwinds Hey, of of And fiscal we sort what a little know guys can guidance, for that's chain, a might think lot those since expect getting maybe XXXX talk back a you start do just actually but step bit key worse, they a also, You for question are? to headwinds get Thanks. or more

John Adent

Thanks, John. Sure.

Soleris customers At a we've that we our meet I with continue team discussion year, a environment we we a it's do difficult invest and job. in to very in though challenging a the new launched this. our to a about because explain it significant of and have We COVID did you benefits And NG of were in environment. lot great we the very the NG And and we momentum very great last AccuPoint had face-to-face for even And priorities, think we have platforms acceptance. product. environment to continuing about, So, have, in right? time, the same do products think did it,

is So, we've got a stuff priority. that new coming

and we drive really -- coming. this to driving adoption of and launched that things that year the market have it's gains So, we share continue the new products

really down a make sure our be pipeline to growth. focus going that's We've and coming excited nice we're about to job. continue so, what's the done we that And

you think last I higher. -- where our at the quarter, have if competitors our of look significantly for some growth some reported is

but market Animal also want We to side Safety side, So tells like taking me is which markets, to the where to share in that markets. continue be. faster on we Safety we want growing Food being the grow we're than the and

on won't workers now -- everybody knows been about going to I think sell? for I last And headcount. a it jobs headwinds into be another to be to but and reasons about it talked is any the I which is how be challenge, this Steve And the discussions that, are with are get and mean, talked headwinds in about a were Steve customer plants just is have. think year And a chain one, that Like going the that's -- cost shutdown. going to year supply that side. challenging why you think I are find the hourly to I it's headwinds the is. challenge. going we

hasn't done So, great aggressive. we've any had It to a very we've be We've had be -- to very creative. caused job.

jobs Our job. single operations something filled. trying battling employees because and but that, fantastic of day is that We've orders it we're find no team shortages keep has or back a to had every done and

So, those would be the and two objectives. major our headwinds also

John Kreger

the Steve the fourth That's in quantified helpful. Thank freight hit quarter. Great. you.

think sales Curious, said stock and due to delays losing as do outs you're I you out any you $XXX,XXX. think on well?

John Adent

so. I think mean, watch John. we closely, don't that I really

lower going going our is, on will money the we're to of work. how going to we're We're make what raise some and that think it, are sell That's I products going at freight that's not to either intensive. to up price or happen going it. end to margin we're

John Kreger

Make sense.

in to is have do opportunity a we -- to to school now? one. And really conferences you Food side do talked Safety. Where demand and hurting that one the go fall the see back? kind of is back kids Is John, lot year still of Okay. last then that ramp business, the food you in ago, institutional sort an think a pressure the of A are or about back on normal, service maybe

John Adent

are correct. you Yes,

come a around at When really that of -- I businesses, around I of again, And our the think upside within nicely, lot think look of there. it's countries. is lot but U.S. North we this back comment specifically America, it's pandemic a and are different stages kind where we different across more we're there's in

that or They're to some And the again back. opportunity bump opening doing kind And saw allergen starting up the sales kits. up nice our it was starting smaller just those of of businesses and we're e-commerce well. think of I really come and business that our So, buy that's with a the internet seeing see are we of That back. coming leading what for shows indicator me quarter. you customers with are test

John Kreger

you. Thank Great.

John Adent

Thanks, John.

Operator

will Connelly next The Stephens. go ahead. Please from come question Mark with

Mark Connelly

talk going outside could growth about you that ahead in are hoping and you like bit a How in genetics issues years meat couple ASF versus -- important think companion health? was a of business I to more animal drivers and there? animals. be is the in John, year growth little animal of your plant-based where So, the think Curious a productivity

John Adent

producer, that is the we then cow, And us. and dairy calf getting into -- well production Yeah. data just the for the can scratching the big we're to as stock couple more how talked base going But Mark, who around start seed drivers best adoption, customer we think a and the the very, that, pyramid tremendous growers, a the look in to out. on right, animal, very One this I farther make outcome. surface in really in the use start down our produce traits around doing the that food is what feedlots, because sure about and right? when even blend phenotypical we've more into and the now And you producers things and looking producer, go with dairy. decisions have stand for. a a that they're deeper of -- with big, of genotypical we're the commercial make we phenotypical environment We still past, opportunity growth about just and traits at beef do feeding you it's to to value genotypical of adoption the kind opportunity of that understand around and increase take

So, get those that agriculture are segments about excited us production things already the are we're really within in. the

think maybe very, that to I do. if test, new nicely the big. we we underrepresented. we whiteleg us we're or like to shrimp we opportunity need and the with is of going tremendous think That's that see with that's very up help agriculture amount business our be grow a about regions going in very which about market shrimp world Southeast mean, to where business, a Secondarily, you talked Asia, test of is

We and have for be markets. of opportunities platform drive the for we some us those think growth help into could to really the in, this story Neogen

market a on that And continue So, see continue -- in. and amount that we upside. think invest and to we it's genomics too things that we to around think, and we're to of there's tremendous I growing focused also as a that something got companions are we've opportunities business want

Mark Connelly

Nebraska lab. at the a you a get have you significant? or are needs mentioned where You facility Do to like that point constraints capacity reinvestment that

John Adent

of the footprint. that quite a of over last We increasing spent years We the just expanded bit Yeah. couple facility. money

We doubled almost may years. facility. think that doubled the XX%. two facility We have in I last size that added we over

thing the stay So, ahead of growth have your that's you Neogen curve. as to challenging with that's

I we've So, a building investing so it's mean, much think make of we And a from so grow. the labor. that to far. it's that. I have at issue. look It is equipment or much sure to we I footprint don't to always doing don't -- facilities we that have continue job keep to think really done But yeah, as nice a and as

were because we Brazil, do? other stuff Well, just Scotland, same she that Lincoln, say, which in those increases was opportunities. capacity we in into So, lot are genomics more running growth, have we of what flowing promotion us into recent local, offload that the things of Brazil. did can didn't before? in We And exact internationally. we can okay, what of business see our we Canada. to is have grow our which genomics team more Brazil, now that at now A have a where labs was we are the we're And China, looking a allows thing. member we where with do Australia, Lincoln, -- So, labs can we we

be and Mexico, to that means better us our over taking all to she's Uruguay, is Now going Chile, leverage lab Argentina Brazil. efforts of allow and to lab time, going she's in which coordinating in which

we're growth those we to stay doing of curve. ahead So, things our make the sure are

Mark Connelly

Super.

question. one Just

term, One more having that how that's of I longer and stuff obviously, lot important got Do affects after the wonder significant curious problem it that? is program. in big short-term. how surge tend to your like right functionality now. you mean, marketing a a listeria to the protein just I'm interest producers other but affects stuff you've see a of I

John Adent

the going supply a to no, to any I basis. we can do. mean, key We pathogen, We Mark, make that's is on. people. sure listeria kill want protect food And

a do see everything's because we it's So, -- that not, good until right? all sometimes of sudden,

Mark Connelly

Right.

John Adent

a and kind a along says, talk it's like, to and good. agent been we let's do everybody an need competitor let's the platform. have it's then going see oh, couple been oh, they about are People issue to more audits. good, analytics -- And of And their

put can needs the data out to So, get an food and that real-time our we customers safest and make of we the hourly government can in that meeting basis the sure so can. putting we there on we're

Mark Connelly

this last you're Are parts freight? stuff as any One maybe that are fairly inflation to like permanent there opposed the confident temporary of question.

John Adent

know. don't I

fuel a prices fuel were there. reason for surcharge XX%. prices in was there high, put fuel dropped what when and surcharge eight those back fuel by years was in gosh, still seven, think a and that I all some And ago carriers then

lower know. So, their skeptical, ability right, don't I'm prices. I around to

we efficiency what we rising the increase need cost environment, in size to to increase to a scale ways what that efficiency to to going to else. everybody to be leverage sure continue that's So more we're do our our look and what than are can is is need we be we make efficient and

Mark Connelly

you. Super Thank helpful.

John Adent

Mark. You bet. Thanks

Operator

ahead, with next Instructions] go David come will [Operator from Guggenheim sir. Securities. question Westenberg Our Please

David Westenberg

you want in. the taking Thank just I Hi. follow-up. for to dive

You of is. great had of commentary cost where kind inflation the terms in of lot a

think labor over with inflation, mentioned feel is? or as inflation to labor of excess -- relative years you kind comfortable maybe industry? maybe I maybe You a just to you think as of operating pricing of equal a component. probably very kind being Neogen couple labor the you Do lean, feel traditionally next of you competitors, if in company. add with your where strong Are do the how of

component. competitors I'm of labor terms So, in your have if you wondering would -- to the relative differences any cost

John Adent

we I are think lean.

I think job really controlling operational of we good expenses. our do a

about great We I think Doug investment group this added already talked added dividends, did Jones. added is we outstanding Steve we As We General right? which Officer. our Chief Commercial year, leadership both So, in paying as Rocklin Counsel contributors. them of spend an the Amy and our

investment an for forward. growth, spend So, drive us growth going see to we help they're as that because

side. in have, we're have the that think our businesses, continue are. of function don't to our ourselves. technology, -- are of in think It's our that value well leaders. business you those. I value the Safety products value instrument type differentiate turns When way I we us more a mean, a that's lot out of allows to market very our premium a bit customers commodity us new feel I lot to lot leading do valuable to pricing which costs harder take allows pack, which things. a in which quite we're that lot to the do some market have don't But type we I lot the core pricing we're on bringing we are little pricing. in everybody have We think for allows that leaders, a and of Animal that other a people and build value of for show we some the we steel technology a the the else that have against of And we and type in to on of customer, us is products,

David Westenberg

accretive last -- terms would what that rate margin outlook growth particularly, promising And then see, that it be sounds you. sounds new and just And a off a like maybe want confirm question just hop in to consumables, as margin Great. like the a be, it's you but pretty it last five-year Thank for would my area. for growth before be would Soleris I I product. of accretive it

John Adent

because excited what that Yeah. we're but the into would growth way about food, And we is and basically pretty consider safety. margin it It's even, cosmetics food, accretive technology a is not we're area. not growing

line with And about. other we've excited growing that so, product pretty got markets we're that were that

So, Thanks is to keep we're Chuck, going that it? everybody. pushing that.

Operator

to our any for Mr. question-and-answer Please Yes, back session. I sir. would ahead. Adent This conclude will like go remarks. over to conference John turn the closing

John Adent

Thank Chuck. you, Yeah.

of press as release us. comments, think, portfolio and marketplace. the we're you that company diversity the the our the I strength going our of from excited again, front markets post saw year in about Neogen's and [ph] has Steve I tone Once into and really this in our pandemic shown

all we're I So, and call the and day a really we're be about talk excited rest going on for future. have to September. great today hope being of you where the in supporting I and us, we'll of appreciate you the

Operator

you now for concluded. is conference The attending today's Thank presentation.

You may now disconnect.

Neogen (NEOG) 20 Jul 212021 Q4 Earnings call transcript