Q3 2024 Neogen Corp Earnings Call Transcript
Key Points
- Neogen Corp completed the relocation of the former 3M pathogen detection product line and manufacturing in one of its Lansing facilities.
- The company completed the first two phases of the four-phase relocation of the former 3M sample handling product line, with the remaining phases expected to be completed by the end of the fiscal year.
- Neogen Corp saw solid core revenue growth in both Food Safety and Animal Safety segments, despite being below expectations.
- The company received approval for a new molecular detection assay, which provides rapid and specific detection of two salmonella serotypes relevant for the poultry industry.
- Neogen Corp developed a testing method for bioethanol producers to determine production from cellulose versus starch-based raw materials, marking a first to market.
- Operational inefficiencies created by system implementations have negatively affected the rate at which Neogen Corp can meet end user needs and ship products to customers.
- The company experienced an extended period with a higher than usual backlog of open orders, which has negatively impacted demand and potentially led to lost sales.
- There are some customers that Neogen Corp will need to win back due to supply constraints and customer attrition.
- Shipping inefficiencies are expected to continue into Q4, impacting the company's full year outlook and requiring additional time to resolve.
- Neogen Corp's third quarter revenues were impacted by shipping inefficiencies, and the company did not reduce its past-due backlog as planned.
Good morning, ladies and gentlemen, and welcome to the Neogen Corporation third quarter 2024 earnings call. (Operator Instructions) This call is being recorded on Tuesday, April 9, 2024.
I would now like to turn the conference over to Bill Waelke. Please go ahead.
Thank you for joining us this morning for the discussion of the third quarter of our 2024 fiscal year. I'll briefly cover the non-GAAP and forward-looking language before passing the call over to our CEO John Adent, who will be followed by our CFO, David Naemura.
Before the market opened today, we published our third quarter results as well as a presentation with both documents available in the Investor Relations section of our website. On our call this morning, we will refer to certain non-GAAP financial measures that we believe are useful in evaluating our performance.
Reconciliations of historical non-GAAP financial measures are included in our earnings release and the presentation, slide 2 of which provides a reminder that
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