Neogen Corporation (NASDAQ:NEOG) Q1 2024 Earnings Call Transcript October 10, 2023 8:00 AM ET

Company Participants

Bill Waelke - Head, Investor Relations

John Adent - Chief Executive Officer

David Naemura - Chief Financial Officer

Conference Call Participants

Brandon Vazquez - William Blair

Timothy Daley - Wells Fargo

Operator

Welcome to the Neogen Corporation First Quarter 2024 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, today's event is being recorded.

I would now turn the conference over to Bill Waelke, Vice President of Investor Relations. Please go ahead, sir.

Bill Waelke

Thank you for joining us this morning for the discussion of the first 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, Dave Naemura. Before the market opened today, we published our first 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 our remarks will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks that could cause actual results to be materially different from those expressed in or implied by such forward-looking statements. These risks include, among others, matters that we have described in our most recent annual report on Form 10-K and in other filings we make with the SEC. We disclaim any obligation to update these forward-looking statements.

With that, I'll turn things over to John.

John Adent

Thanks, Bill. Good morning, everyone, and welcome to our earnings call covering the first quarter of our 2024 fiscal year. We've made significant progress across a number of fronts on the integration of the former 3M Food Safety business, while continuing to navigate soft market conditions. Our results for the quarter were largely as anticipated with two primary exceptions, greater than expected weakness in Asia and in genomics, along with a couple of unanticipated cost items.

For Neogen in total, we saw core revenue growth decline by 0.4% in the quarter on a pro forma basis, which includes a negative impact from China of approximately 1%. In our legacy Food Safety business, core revenue growth was in the mid-single digit range, including positive volume growth in an end market where food production volumes continue to be down on a year-over-year basis for many producers. Additionally, certain producers have taken capacity offline in order to right-size the output from higher levels last year to the current environment.