Hey, good morning, everyone. Thank you again for joining us. Welcome to the 41st annual JP Morgan Healthcare Conference. My name is Edwin Zeng. I work in the JP Morgan Healthcare Investment Banking team in New York. Today, our presenting company is Neogen. Please join me in welcoming our presenter, John Adent, CEO and President of Neogen. Thank you. Thanks for the thunderous round of applause this morning. You know, normally, like, at our sales meeting, I put $100 under each seat in front to try to get people to come to the front, so you've missed out on that. I am John Adent. I'll be providing an overview of Neogen. I really appreciate you being here this morning. Quick reminder that we will have some forward-looking statements in this presentation. My attorney said, "Please familiarize yourself with this disclaimer." At Neogen, over the last 40 years, we've been committed to improving food safety, across the world's global food supply. Our mission is to be the leading company in the development and marketing solutions for food and animal safety, and that mission's never been more important than it is today. Our vision for the future is continue to play a key role as a leader in enhancing food safety, quality, and the quantity of the global food supply. With the rapid growing population we have, you know, we couldn't see a vision that is more important than this. At Neogen, our number one goal is to protect the food supply. That's what we do every single day. At Neogen, we get up every day to make sure the people and the animals that you care about are protected and safe. It's a great mission and vision statement. It's fun to come to work every single day. On September first, we completed our merger with the former 3M Food Safety Division, bringing together two really great businesses. You know, at Neogen, we are the leading pure-play food security company. In addition to our food safety and animal safety products, we have a very strong genomics platform, analytics platform, and also blockchain solutions for our customers. 3M was the leader in food safety solutions, specifically around their indicator testing, because Petrifilm is a global recognized brand. I think if you go out and talk to customers, they'll tell you there is no replacement. It's a fantastic product and a really great line. 3M business had a great diversified product group or product base and a really attractive financial profile that got us excited. If you look at the combined company, you know, we talked about our goals for fiscal year 25 is to be $1 billion in revenue. You know, continue our double-digit growth trajectory that we've done over the last 23 years and an adjusted EBITDA margin of 30%. We'll talk a little bit more about that as we move forward. The combination, to me, really solidified us as the leader in food safety. We have a much larger platform to capitalize on long-term tailwinds that we're gonna talk about, you know, on the next slide. We're really well positioned to accelerate our growth and add significant value for our customers, our employees, and our shareholders. So far, the response of the merger from our customers has been fantastic. Like, they're really, really excited about our broad portfolio. They're excited about the new solutions we have, and they're excited about the teams, 'cause we have an excellent team that really is unmatched in the industry, whether it's technical service, helping them quantify their needs and helping them explain to their customers why their products are better and healthier than everybody else. This is a little bit of what we bought, right? What the Food Safety Division of 3M looked like. The portfolio had a long track record of growth. You'll see that, you know, they also had double-digit growth over a 20-year period. What I like about it is the high recurring revenue stream. 95% of this line is consumable products. It really is a razor blade model, which we are excited about because that really fits the Neogen model. The 55% of the business was, like we talked about, indicator testing, which really has no parallel in the marketplace. It's the market standard. We see huge opportunities for that type of business to continue to grow within the marketplace and also take that type of technology to other markets where they weren't allowed to in the past. We really think that putting these two businesses together has given us a great opportunity to continue to grow. We saw significant opportunities also because when you think about these two businesses, even though we're in the exact same markets, we saw less than 35% crossover of common customers. Huge cross-selling opportunities, which got us really excited about the combined combination. This is a busy slide. It's one that you guys can read later on. It talks about the broad market categories and all the things that we do within Neogen and how we feel it's important to protect the food supply from behind the farm gate all the way to the dinner plate. A lot of our competitors start at the food processor, but that's not where food starts. Food starts at the farm. We're really the only company that looks at food safety from that total perspective. I think a great way to think about Neogen is what we do with a large integrated dairy customer. We have a large integrated customer, and we start with them with our genomics. They use our genomics products to pick the best animals that they want on their dairy farm. And what they're doing is they're looking for specific characteristics, whether it is increased milk production, higher butterfat, A2. Those are certain proteins that they want, right? That they wanna make sure that they're gonna enhance the herd. From that, once you've picked the best animal, you wanna make sure that it's growing in an environment that's clean and healthy. They use our cleaners and disinfectant lines to make sure that the environment those animals live in are the cleanest possible environments. They use our mycotoxin tests to make sure that what they're feeding those high-performance animals is the best type of food, the best nutritious food they can have available. Best case, if you have mycotoxins in animal feed, the animal gets sick. Worst case, they die. It's very, very important, right, our test to make sure that they've selected the animal, they've put it in the right environment, and now it's gonna perform to the maximum level. Once you're in that closed environment, there's really only three ways that pathogens can get into that environment, okay? One is through people. It comes in on people's boots and shoes, so they use our cleaners and disinfectants to make sure that doesn't happen. The other is mice and insects. You know, you think about the bubonic plague, right? That's how that stuff got spread. That's why these lines, while people don't really think about it as food safety, it really are strong food safety lines because it protects the environment which those animals are living in. From there, this particular customer uses our ATP products, which checks for general cleanliness. They're checking the milk tanks for cleanliness. They're checking the milk trucks for cleanliness. They're checking their facilities now. Now the milk is in their facility, checking their general facilities for cleanliness as a part of their food safety protocols. They also use our Listeria Right Now product. Our LRN product really is an environmental product. We can check for the presence/absence of Listeria in under an hour. Traditional test takes 72 hours. That's to do the test. If you sample on Monday, you send it to the lab, they take 72 hours, you get the results by Friday. We position it more as an environmental test. Before you run $2 million worth of product, let's check the line for Listeria. You check it comes back negative, you run the line, you feel confident that the product is good, you still check the finished product. Traditional way was you run the line, check the finished product, oops, I have Listeria, I got to throw away $2 million worth of product, right? Not a very good process. They use our Soleris System, which is a way to check for yeast and mold, right? Because this is a further processing facility. As you grow and you process food, other things grow too. Not always good stuff, right? There could be yeast and mold, so we need to check for yeast and mold in the finished product. They use our allergen test because they wanna be able to explain to their consumers, "This is free of egg. This is free of peanut. This is free of these allergens," right? They use our test to be able to tell their customers, "You don't have to worry. These are free of these things that you're worried about." They also use our Megazyme products, which is our more of a food quality line, where they wanna say, "This is the amount of dietary fiber in this product. These are the polysaccharides in the product." They use a broad range of Neogen products from the farm all the way through to their consumer products. What's exciting about this opportunity is we're just starting now to introduce them to Petrifilm. Because they're using traditional testing methods to look for other organisms where they can now use our Petrifilm line to do that, which is a great opportunity for cross-selling for us. This is a, this is an interesting slide, which I really like. I tell our team, you'll see later on, we've grown 23 consecutive years. I tell our team, before we hurt ourselves, patting ourselves on the back, one of the reasons we've been able to do that is 'cause we're in great markets, right? I've been in markets before that are flat to declining. It's hard to grow in those types of markets. We're in a great market, right? We have very strong growth markets. Our food safety market is a $22 billion market with high single-digit growth rates, right? The animal safety is a $55 billion market with mid-single digit growth rates. Genomics is a $1 billion with double-digit growth rates. The other thing I really like about our business is our mix. You saw previously indicator testing for 3M was 55% of the business. Today, it's the largest, but it's 25%. We have a very diversified portfolio. 25% in indicator testing, 25% in bacterial and sanitation, you know, 10% in genomics, 10% in allergens. It's just a really great diversified business, which gives us the opportunity for growth. If something is happening in one segment, we're able to compensate and grow in another segment. Same thing for geographic mix. We're 55% North America, you know, I'm pretty excited that we're 15% in Asia, we're 15% in Europe, Middle East, 10 in LATAM, and the rest being in Australia and New Zealand. That's a really great mix around the world because we're able to capitalize on trends across many, many different things that are happening around the world and things that are affecting local markets. We talked about before, you're not gonna get that type of growth rate without great tailwinds. We have great tailwinds. People wanna know what's in their food, right? Think about yourself. Think about the difference that you shop than what you did 10 years ago, right? You wanna know what's in your food. Your kids definitely wanna know what's in their food, right? They're looking. They wanna know it's free of these allergens. It is making sure that it has the dietary fiber, the protein, all the different things that they want. Consumers are very conscious now about what's in their food more than what they were in the past. That's a great tailwind for Neogen. The other is increasing food allergies. Right? Some of you are as old as me. When I was growing up, there was no such thing as a gluten allergy. Right? Just didn't exist. Okay? Today, you have, starting in January 1, sesame is now a listed allergen in the U.S. Okay? We saw our allergen tests volume increase before January 1, continue to grow. There are nine allergens, listed allergens in the U.S. There's 14 in Europe. We're gonna continue to have more. We'll find new things. Celery is a listed allergen in Europe. Did anybody know there's a celery allergen? Me neither. If you want it, I'll make it. We had somebody ask for an apple allergy test. Got it. What do you wanna know? These are great tailwinds for our business, right? 'Cause people, as you start to think about more personalized medicine and understanding how your body reacts to inputs that you receive, that's really what we do to help our customers explain to their clients how the things they're putting in their bodies affect them. Right? This is strong tailwinds for Neogen. Rising incomes. We see this in our growing markets around the world. As income rise, the first thing people do is they put more protein on their plate. Right? I lived in China, getting old, 30 years ago. Okay? When I would go out and shop in China, that piece of pork I bought at the wet market, I didn't know if it was hanging there for an hour or three days 'cause it's an open air wet market. You took it home, and you cooked the heck out of it, and you still got sick. Right? Those types of things have changed. People's expectations have gone up. I mean, the changes that I saw in China from 30 years ago to now are just. It blows your mind the amount of advancement there is. The expectation is, if I'm gonna go out and spend my money, I am not gonna get sick. That is what Neogen does. That's how we help those food producers deliver that promise to those customers. We also see increasing incidence of pathogen contamination. This is another thing that's happened in the U.S. Last year, 1.35 million people in the U.S. had Salmonella. Okay. I was one of them. You don't want it. It's a quick way to lose 15 pounds, but it is an awful way to lose 15 pounds. Like, it is horrible, right? We saw in the summer that the USDA listed Salmonella as an adulterant in frozen chicken pieces, okay? Which means people are gonna have to test. Now, Dave and Bill recently joined Neogen. I told them one of the great things about joining Neogen is we've got a great mission, a great vision. We're protecting the food supply. The downside is you're never gonna eat out again. Okay? With Salmonella, what's interesting is in those chicken parts, you can have 25% of the chicken can have Salmonella, and it's okay. How does that make you feel? Cook your chicken, right? It's not zero, okay? As people learn more about that, things will change, right? People are gonna demand greater quality and demand changes in the food supply, which is why we're here. This, this next slide I think is interesting. We are in a very complex ecosystem. There's a ton of different people that touch your food before it gets to your plate, okay, whether it's the farmers, the food processing, and all of the different things that touch them. 3M's Food Safety business was very similar to a lot of competitors. They developed a technology that was developed for another piece of business that had applications in food safety, and people threw it over. If you look at this slide, most of our competitors compete in one circle. Some compete in two. Most compete in one. We compete in all. That previous customer I talked to you about, I asked them, "What would it take to replace Neogen with other vendors?" They said, "eight to nine." eight to nine other vendors to do what we do. What's interesting with that is the deep understanding we have of the customer's needs and how we're gonna interact with those customers. We've asked them many times, you know, "What's your biggest problem?" "Oh, you can't help." "Try me." Right? Try me. We can help you with things. We had a meat processor, asked them this question. They said, "Oh, our biggest problem is we're losing shelf life in the grocery store." That's a big problem for a meat processor, right? If you had 14 weeks, and it drops to seven, and you have to throw all that meat away, that's huge profitability. We said, "Oh, send us a sample." "Oh, what are you guys gonna do?" "Send us a sample." We ran it through our genomics lab, right? We found an aquatic organism in that meat sample. Couldn't figure it out. Called the customer. "This is really weird. Can't figure it out. There's this aquatic substance in there, you know, an organism." "Oh, we changed to sea salt in the processing." That lowered their shelf life by 50%. By switching back to iodized salt, it went right back up. Now customer is very grateful. I was pissed 'cause we didn't charge anything for that, right? Those are the type of capabilities we have. Next time that customer has an issue, who do they come talk to about their food security? They come talk to Neogen, right? That's our ability to continue to help them grow. Our integration is underway, and we did a tremendous amount of work pre-close. We already knew the markets. We knew the customer base. I went to Minnesota. We were meeting with the team. The leader was going to present to me their business, okay? She had 45 slides, and I'm quickly looking through the slides and I said, "Monica, look, the first 30 slides are about the customer's markets. You can skip all that. I wanna know how we're gonna grow, 'cause I know what you do, I know how you reach the customers, I know your value proposition." She said, "John, I've been at 3M for 35 years, and nobody has known what we do in this company." Now, that's not a knock on 3M. My business, that's less than 1% of my total revenues, I don't spend any time either, right? We were able to pull this business out and really show them that we understand their markets, we know how to grow the business, we understand what they do, and they are really, really excited, right, to be part of Neogen. You see that excitement, right? I'm gonna brag a little bit about the team. The second day of integration, we had combined our CRM systems. Now that's a big deal, right? In one common platform, we knew who the common customers were, what they were buying, who was calling on them. What allowed us to do was in this first quarter is we have all the sales teams realigned. Everybody knows who their customers are. Everybody knows who's their calling on. We've done all the cross-training, and we've identified what are the biggest opportunities for cross-selling within those customer bases. What I warned the team about was, while this integration is big for Neogen, we cannot turn our back on our customers. The team was very focused on making sure we're forward-facing with the customers to continue to drive things forward. We've been able to do that. Was at our sales meetings in LATAM, North America and Asia, great excitement. You know, one of the things the teams did during the sales meetings was share success stories during the day. One of them I thought was really exciting. We were in the European meeting. We had lost the largest dairy in the Middle East to a competitor for genomics last year. They came in and did a 35% discount to us. We talked about it. We said, "Look, we provide this value. We're not gonna drop price." It hurt. It hurt to lose a customer. About 10 months, they signed a three-year contract. About 10 months in, they reached out to us. They weren't very happy. We just got that customer back. Within 12 months, we just got that customer back. What I was most proud of with the team is not only did we get the customer back, we got them back at the price we wanted with our price increase. We show the value, right, to our customers, and the customers recognize the value. Think about now what that competitor is gonna do. What's their next option now to be? So they can give it away? Can't give it? I mean, go ahead. It's not a good strategy, long-term strategy, right? Those are things we see with the value we provide. The new team members are excited to be part of the team, but there's a little bit of Stockholm Syndrome. Like, we have the gate open, and we say, "Come on out. Let's make decisions. Let's find ways to grow." They're a little tentative, but we're moving through that. That team has taken on significant leadership roles within the new organizations. Those newer team members are leading sales, R&D, marketing, manufacturing, tech service, IP, regulatory. We've really done a nice job of combining the group into one Neogen. We just recently, last week, opened our central distribution system in Mount Sterling, Kentucky, which is critical for us to be able to move off the distribution agreements of 3M. It's gonna allow us to ship worldwide and give better service to our customers around the world. Our Lansing plant is underway in construction. It's on track and ready to go. I've got a lot of questions before about, you know, building this plant and designing the Petrifilm plant and how do we feel comfortable. What gives me a lot of confidence in that is 3M had a cross-contamination issue at their facility in Sioux Falls, they had to move a Petrifilm manufacturer into Poland. The engineers that did that came with us in the acquisition. This is very recent, within the last two years, we've got great learning. The thing that those engineers were so excited about was this plant they get to design specifically for Petrifilm because that plant makes many other things. Petrifilm is basically two pieces. Come on in. I guess that's good. Two pieces of plastic, you put a media and seal it. That same plastic is what 3M uses for their Dermal Care and some of their other lines. It's not the most efficient manufacturing. While in the pro forma, we didn't put any in there for manufacturing efficiencies, we're finding new efficiencies as we go forward, that we're excited about. The first quarter was good. I hope all of you saw our first quarter results. We were really proud of them. We knew it was a highly profitable business. We confirmed it, and you saw that, it increased Neogen's overall profitability, right, throughout the whole business. We can only do that 'cause we have a great team, and we have great people working at Neogen. My team hears me talk about this a lot, right, where I say that we can never have too many great people. We really need to increase. I stole this from Dave, and I was in a meeting, and I said, "Look, I wanna be the dumbest person in the room." I'm with my leadership group, and they're sitting there, and Amy, our general counsel, looked at me and said, "John, mission accomplished." Right? It's a great team. We've got a great team. We know exactly what we need to do. We've got the expertise to continue to pull this off, and you're seeing it in the first quarter. We talked a little bit about, you know, what our target was, and we went out and said, "We will be $1 billion in our fiscal year 2025, we'll have $300 million in adjusted EBITDA and adjusted EBITDA margin at 30%. I think second quarter results reaffirm that. For those of you that didn't see it, our adjusted EBITDA margin in the second quarter increased over 500 basis points on the new business. New business is a really strong business. The new Neogen going forward is a much more profitable business and has a much stronger financial profile than even our old business, which was fantastic. This is my why should you believe me slide, right? We talked about this. You cannot have growth like this, 23 years of consecutive growth at a double-digit CAGR without being in great markets. Those are the things that I think are important. If you look at that, both of those businesses grow. That's because we have strong underlying fundamentals in those markets, and we continue to capitalize those and grow. You will also hear that, you saw in our press release, we've grown 122 out of 128 quarters. Sounds great, right? If you think about that's six quarters in the last 32 years where we did not grow, and we were profitable in every one of those years. That's a great track record, and I'll put that up against anybody in the industry. My industry or anybody else's industry. We have a fantastic business in a really great market where we are the recognized leader, and we've strengthened our position. We see the tailwinds that we've talked about, right? That I've shown you earlier of continuing to grow markets that are fundamentally strong. Now we don't grow double digits every quarter, okay? It's not that easy. If it was that easy, anybody could do it, right? Over the long term, we do have double-digit growth rates, and we continue to drive share value and profitability for our customers and our shareholders. Great tailwinds, super strong team, unmatched products and services in the marketplace, and just a really, really strong business. With that, I'm gonna open it up to any questions you might have. Thank you. Yep, and they want you to use the microphone so we can have it recorded. Oh, we've got one here. Yep, there's a question here. Hi, thanks for the presentation. The guidance you gave last week or two weeks ago, you guided to some kind of organic growth to the legacy business and gave us kind of rough parameters of what revenues are gonna be. Can you help us understand what the 3M business is growing at currently organically and maybe what that should be in the longer term as you integrate it? If you look at this slide, which is interesting, this is the green is the food safety, kind of their growth rates. Their growth has largely been organic. We talked about their growth rates recently have been a little bit slower because of some backorder issues we're having in manufacturing. It's about a 5%-6% headwind. We saw improvement in the quarter with 3M on backorders, but it's not to where we feel comfortable that it should be, so we continue to work with 3M on that. Long term, it is a high single-digit organic growth business. We see a little softening in the market right now. I mean, we see that with customers. We see unit sales are not as strong as they were. We've been able to do realistic price increases across that have helped us continue to grow. What you've seen historically is in 2008 and 2009, the Financial Crisis, we grow. In COVID, we grow. In the slowdown, we grow, right? We find ways to make sure that we continue to grow the business and find opportunities. Does that help? Great. Yes. A question about blockchain use in pre- and post-feed mill. You're seeing a lot of Non-GMO corn, soybeans trying to invade that market. If you take the chicken or fish industries, both are very tough to do blockchain. Do you have a solution for carrying from the ag material all the way into the animal? Our solution today really starts with the protein, right? We have a customer which is Missouri Prime. If you buy a Missouri Prime steak and take a sample and send it to me, I can tell you every input that went into the animal, right? The biggest challenge with blockchain is this. We met with the FDA. They, you know, they really want to focus on blockchain for food security. We showed them our solution. We proved it works. We have a customer that buys it. The FDA said, "Fantastic. We love it. Now we want you to do it for free." We said, "Well, we're out." Like, we're not doing it for free, right? That's the biggest challenge we have within the food supply chain, is that people don't make money at the same time. The chain makes money at each other's expense. When I go to a McDonald's or a Wendy's and say, "Don't you wanna know, right? What everything that went into the hamburger patty?" "Yes, I wanna know. Make JBS pay for it." I go to JBS, "Hey, don't you wanna know everything that went into that animal before it got in the slaughter plant and you made it a hamburger?" "Yes, make the producer pay for it." Right? Nobody wants to ask the consumer to pay, so they're trying to push it down the channel. That will eventually change. It's like organic. If you think about the organic market, right? The organic market 20 years ago was zero. It's now 15%-20% of the total market. At some point, consumers will say, "I wanna know." When consumers say, "I wanna know," then we'll do it. Thanks. Thanks for your question. Great. Any other questions? I can ask one. Oh, great. All right. Let's go. All right. John, I know you talked about, China and the global footprint that Neogen has. Could you sort of elaborate on what are some of the opportunities in emerging markets for Neogen? Yeah, sure. We've seen that with specific market growth. If you look at Australia as a great example. One of the ways we sell today in 160 countries. We have physical presence in. Oh, I got the new number now. 48, something like that, mid-forties. In those other markets, we use distribution, and it allows us to. Most of our distributors are exclusive, Australia was a great example. Their exclusive distributor, we went in, we bought a genomics business, right? After that, we bought our food safety distributor, and then we introduced our animal safety products. That business has grown 300% over the last three years. We see that when we get closer to the customers. I don't. We see these emerging markets. China is big. We continue to grow in our Chinese market. We see it all in Southeast Asia. This is what we talked about with the rising incomes and the rising level of people wanna put more protein on their plate. It really drives kind of our business forward in food safety. We see emerging markets growing. We started to do business in North Africa. You know, that's gonna be important. That's gonna be a key for us going forward, is that's where the population growth is coming from. How we're gonna feed that part of the world is an open question, right? Is it gonna be bioreactors making protein? Maybe. Because it's gonna be hard to produce enough protein for those people. If that's the case, what a boon for Neogen. We already work with the manufactured meats group because to grow manufactured meats, you use Neogen media. When you're growing meat in a bioreactor, guess what? You're growing a lot of other stuff too that you need to check for. You're using Neogen products to check for pathogens. You're using Neogen products to check for any other adulterants, right? Whether it is traditional meat growing, new technology, old market, new market, we have the capabilities to cover all these different segmentations, which makes us really, really strong. Okay? Thank you for that. Yeah. Do we have any other questions from the audience or online, potentially? Well, good. You know, we can give them back five minutes 'cause they got to walk to the other conference. Back you to my room. Let's give another round of applause for John for presenting. Thank you, everybody. Thanks for being here.