In This Article:
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Revenue: $221 million for the third quarter.
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Core Revenue Growth: 20 basis points, excluding foreign currency, acquisitions, and discontinued product lines.
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Foreign Currency Impact: Headwind of 310 basis points compared to the prior year.
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Food Safety Segment Revenue: $153 million, down 3.2% year-over-year.
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Animal Safety Segment Revenue: $68 million, with a core revenue decline of 2.6% year-over-year.
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Gross Margin: 49.9%, a decrease of 120 basis points from the previous year.
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Adjusted EBITDA: $49 million, representing a margin of 22%.
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Adjusted Net Income: $21 million.
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Adjusted Earnings Per Share: $0.10.
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Free Cash Flow: Outflow of approximately $14 million for the quarter.
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Debt: Gross debt of $900 million, with 61% at a fixed rate.
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Cash Position: $128 million.
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Full Year Revenue Outlook: Approximately $895 million.
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Full Year Adjusted EBITDA Outlook: Approximately $195 million.
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Capital Expenditures: Expected to be approximately $100 million for the year.
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Full Year Free Cash Flow Outlook: An outflow of approximately $20 million.
Release Date: April 09, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Neogen Corp (NASDAQ:NEOG) achieved a 7% core revenue growth in its Food Safety segment, indicating a solid underlying business despite market challenges.
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The company successfully completed the refinancing of its Term Loan A, extending the maturity by close to three years and realizing 60 basis points of interest rate savings.
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Neogen Corp (NASDAQ:NEOG) has made significant progress in the integration of its transformational acquisition, with sample collection recovering to prior production levels.
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The company is focusing on its differentiated bovine genomics product offering, which has shown growth despite challenges in other areas of the genomics business.
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Neogen Corp (NASDAQ:NEOG) is taking actions to accelerate the building of a more profitable and focused business, with potential portfolio actions expected to be accretive to margins and prioritized for debt repayment.
Negative Points
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Neogen Corp (NASDAQ:NEOG) faced a challenging macroeconomic environment, with uncertainty in global trade and potential recession concerns impacting customer confidence and inventory commitments.
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The company's third-quarter results were below expectations, with core revenue growth of only 20 basis points and a foreign currency headwind of 310 basis points.
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The Animal Safety segment experienced a core revenue decline of 2.6%, with notable softness in China due to macroeconomic uncertainty.
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Neogen Corp (NASDAQ:NEOG) is dealing with challenges in its genomics business, which has been a headwind for the past seven quarters, resulting in a mid-single-digit decline in core revenue.
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The company is updating its full-year revenue outlook to approximately $895 million, reflecting a softer market backdrop and the uncertain impact of tariffs.