Neogen (NEOG) Piper Sandler 36th Annual Healthcare Conference summary

Financial performance and business update

• Preliminary Q2 revenue reached approximately $230 million, with sequential improvement in core growth rates and a return to positive growth in animal safety after an 8% decline in Q1.

• Margin improvement initiatives are underway, with effects expected in Q3 and Q4, and further details to be shared in the January earnings call.

• Guidance for the fiscal year remains on track, with FX headwinds noted; market share recovery accelerated in Q2, and new share gains are expected to propel growth in FY2025.

• Strong free cash flow generation is expected as integration spending winds down.

Strategic initiatives and integration

• Integration of the 3M food safety business expanded direct sales and technical teams into 16 new countries, supporting international growth.

• Most integration work is complete, shifting focus back to customer engagement and growth.

• Three of four acquired manufacturing lines are operational; Petrifilm manufacturing is being transitioned to new custom equipment, with full ramp-up expected in two years.

Market environment and industry trends

• Food safety core growth remains mid-single digits despite macro headwinds; in normal markets, growth is typically high single digits.

• Inflation has led to declining unit growth for seven to eight quarters, but declines are narrowing and core growth continues.

• Regulatory and political changes are not expected to significantly impact food safety demand, as safe food remains a bipartisan priority.