The following is a summary of the Neogen Corporation (NEOG) Q1 2025 Earnings Call Transcript:

Financial Performance:

• Neogen's Q1 2025 revenue was $217 million, facing a core decline of 1%.

• The foreign currency impact was a headwind, reducing revenue by 390 basis points compared to the prior year.

• Gross margin for Q1 2025 was 48.4%, a decrease from 51% year-over-year.

• Adjusted EBITDA for Q1 2025 stood at $44 million, marking a decline of 280 basis points year-over-year.

• Adjusted net income and adjusted earnings per share were reported at $14 million and $0.07, respectively.

Business Progress:

• Neogen has marked the two-year anniversary of acquiring the 3M Food Safety, enhancing its leadership in the food safety market.

• Neogen continues to focus on expanding and recovering market share in the food safety domain.

• Plans are underway to upgrade the Petrifilm production facilities with new equipment expected to arrive in January.

• The completion of relocating the former 3M sample collection product line is enhancing production capabilities.

Opportunities:

• Regulatory tailwinds are boosting the food safety market, particularly with new U.S. regulations on food contaminants such as salmonella.

• Increased consumer expectations around food transparency support Neogen's product demand.

• Neogen's petrifilm product line shows potential growth with new equipment and high customer demand.

Risks:

• Challenging end market conditions in the Animal Safety segment, particularly influenced by declining net farm income in the U.S.

• Shipping delays and operational inefficiencies initially impacted customer trust, although improvements are noted.

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