NEOGEN CORP

Neogen Corporation and its subsidiaries develop, manufacture and market a diverse line of products and services dedicated to food and animal safety. The Food Safety segment consists primarily of diagnostic test kits and complementary products sold to food and animal feed producers and processors to preserve the safety and quality of food to prevent contamination and foodborne illnesses such as foodborne pathogens, spoilage organisms, natural toxins, food allergens, and ruminant by-products. The Animal Safety segment is engaged in the development, manufacture, marketing and distribution of veterinary instruments, pharmaceuticals, vaccines, topicals, parasiticides, diagnostic products, rodent control products, insect control products and genomics testing services for the worldwide animal safety market. Sales to customers outside the U.S. accounted for 51.2% ¹, 50.2% ², and 49.7% ³ of total revenues for fiscal years ended May 31, 2026, 2025 and 2024, respectively.

While competitors differ across individual markets, management is not aware of any single competitor that is pursuing Neogen’s fundamental strategy of developing and marketing a broad line of products, ranging from disposable tests and culture media to veterinary pharmaceuticals and instruments for a large number of food safety and animal safety concerns. For each individual product or product line, the company faces intense competition from companies ranging from small businesses to divisions of large multinational organizations, some with substantially greater financial resources. The company competes primarily on the basis of ease of use, speed, accuracy, and other performance characteristics of its products, as well as the breadth of its product line, the effectiveness of its sales and customer service organizations, and pricing. In the food safety segment, management believes a general advantage is maintained over competitors offering only limited product lines due to a large professional sales organization offering a comprehensive catalog of food safety solutions. In the animal safety segment, the company does not face a single competitor that competes across all of its businesses. Neogen markets BotVax B, the only USDA-approved vaccine for the prevention of botulism Type B in horses. Neogen Genomics is a leading worldwide commercial animal genomics laboratory employing cutting-edge technology.

The company generates revenue through the sale of consumable diagnostic test kits, culture media, immunoassay and nucleic acid detection products, veterinary instruments, pharmaceuticals, vaccines, topicals, parasiticides, rodent and insect control products, and genomics testing services. The majority of test kits are consumables, single-use culture, immunoassay and nucleic acid detection products that rely on proprietary antibodies and RNA and DNA testing methodologies. The majority of animal safety consumable products are marketed through veterinarians, retailers, livestock producers and animal health product distributors. The company also offers advanced software systems, including Neogen Analytics, a software-as-a-service offering designed to aggregate and track data generated from environmental monitoring, product testing, and sanitation verification activities. Products are marketed by sales personnel and distributors throughout the world, with a network of distributors in more than 100 countries ⁴.

The Food Safety segment includes products within the following primary categories: Natural Toxins & Allergens, Bacterial and General Sanitation, and Indicator Testing, Culture Media & Other. Natural toxins solutions are used across the milling and grain industry to detect mycotoxins and histamine, while allergen detection solutions include tests for peanut, milk, egg, almond, gliadin (gluten), soy, and hazelnut residues. Bacterial and General Sanitation products include rapid testing tools using ATP detection, microbial detection solutions for organisms such as E. coli (including O157:H7), Salmonella, Listeria species, Listeria monocytogenes, Cronobacter, and Campylobacter, the Molecular Detection System (MDS) using LAMP technology, and Reveal products using lateral flow immunoassay technology. Indicator Testing, Culture Media & Other includes Petrifilm standard and rapid plates, the Soleris system, sample collection solutions, and Neogen Analytics software. The Food Safety segment incurs royalty expense for licensed technology, generally in the range of 2% to 10% ⁵ of revenues on products containing licensed technology. Royalties under these agreements, expensed to sales and marketing, amounted to $1.9 million ⁶, $1.6 million ⁷, and $3.3 million ⁸ in fiscal years 2026, 2025, and 2024, respectively.

The Animal Safety segment encompasses Life Sciences, Veterinary Instruments & Disposables, Animal Care, Rodent Control & Insect Control, and Genomics Services. The Life Science/Toxicology division offers over 125 ⁹ drug detection kits screening more than 300 ¹⁰ drugs and metabolites. Veterinary Instruments & Disposables, through Ideal and Prima Tech brands, offers approximately 600 ¹¹ veterinary instruments and delivery systems. Animal Care includes products such as PanaKare, Natural Vitamin E-AD, RenaKare, Uniprim, Provecta parasiticides, BotVax B vaccine, EqStim immunostimulant, and ImmunoRegulin. Rodent control products are sold under brand names Ramik, CyKill, and Havoc, while insect control includes the Prozap, SureKill, and StandGuard brands. Genomics Services operates six ¹² genomics labs offering DNA genotyping, sequencing, and trait analysis for livestock and companion animals.

In July 2025, the company divested its global Cleaners and Disinfectants business. On March 2, 2026, Neogen announced it had entered into a definitive agreement to sell its Genomics business to Zoetis Inc. for $160.0 million ¹³. The transaction is subject to customary closing conditions and regulatory approvals, and the parties continue to work toward a closing by the end of the first half of fiscal year 2027. In July 2026, the Australian Competition and Consumer Commission (ACCC) and the New Zealand Commerce Commission (NZCC) each announced they are moving their respective reviews into the second phase of review. In April 2025, Neogen Food Safety Corporation entered into the Refinancing Amendment, which provides for a new tranche of senior secured term loans in an aggregate principal amount of $450.0 million ¹⁴ and a revolving credit facility in an aggregate principal amount of $250.0 million ¹⁵, against which $100.0 million ¹⁶ has been drawn. The 2025 Term Loans will mature on April 4, 2030. As of May 31, 2026, a total of 817 ¹⁷ employees were assigned to sales and marketing functions, 89 ¹⁸ scientists and support staff were employed in research and development, and approximately 1,257 ¹⁹ full-time employees were assigned to manufacturing operations. Total worldwide employment was 2,636 ²⁰ people, with 1,346 ²¹ located in North America and 1,290 ²² international. The patent portfolio includes approximately 157 ²³ U.S. patents, 445 ²⁴ patents in countries outside of the U.S., and 102 ²⁵ pending patent applications globally. The trademark estate includes approximately 84 ²⁶ trademark registrations within the U.S. and 449 ²⁷ trademark registrations in countries outside of the U.S.

For the fiscal year ended May 31, 2026, total revenues were $1,000.0 million ²⁸, compared to $1,000.0 million ²⁹ in fiscal 2025 and $1,000.0 million ³⁰ in fiscal 2024. Net income was $1,000.0 million ³¹, compared to $1,000.0 million ³² in fiscal 2025 and $1,000.0 million ³³ in fiscal 2024. Diluted earnings per share were $1.00 ³⁴, compared to $1.00 ³⁵ in fiscal 2025 and $1.00 ³⁶ in fiscal 2024.

The company's growth strategy consists of four elements: increasing sales of existing products, introducing innovative products and services, growing international sales, and acquiring businesses and forming strategic alliances. Management expects that a number of new and improved diagnostic tests and other complementary products for both the Food Safety and Animal Safety markets will be commercially available at various times during fiscal years 2027 and 2028. The company maintains an active business development program to identify and capitalize on opportunities to acquire new products, businesses or technology. International expansion is a key growth vector, with sales to customers outside the U.S. accounting for 51.2% ³⁷ of total revenue in fiscal 2026, compared to 50.2% ³⁸ in fiscal 2025 and 49.7% ³⁹ in fiscal 2024. The company maintains locations outside of the United States in 28 ⁴⁰ other countries and a network of distributors in more than 100 ⁴¹ countries.

The pending divestiture of the Genomics business to Zoetis Inc. for $160.0 million ⁴² represents a strategic repositioning. The transaction is expected to close by the end of the first half of fiscal year 2027, subject to customary closing conditions and regulatory approvals. In July 2026, the ACCC and NZCC each announced they are moving their respective reviews into the second phase of review. The company also expects to begin its planned multi-quarter manufacturing transition of Petrifilm to its Lansing manufacturing site beginning in fiscal year 2027, with management believing they are on track to manufacture sellable Petrifilm product in that timeframe.

Management currently expects future research and development expenditure to approximate 2% to 5% ⁴³ of total revenues annually. The company expects to continue incurring duplicative costs during the Petrifilm manufacturing transition period. Tariffs and other trade measures have increased and may continue to increase material input costs, and the company does not expect to be able to fully mitigate the impact of these increased costs or pass price increases on to customers. New and increased tariffs as well as uncertainty regarding global trade policies have also contributed to softened demand for certain products, and these factors are expected to continue to negatively impact results of operations and financial condition in the near term.

The company believes it is on track to manufacture sellable Petrifilm product and begin its planned multi-quarter manufacturing transition of Petrifilm to its Lansing manufacturing site beginning in fiscal year 2027. Operational and performance qualification testing has taken place throughout fiscal year 2026. Future demand increases could be accommodated by adding shifts, and management believes current output of primary product lines could be increased using current space available, though doing so would require investment in additional equipment and personnel. The company is currently undertaking additional phases of enterprise resource planning (ERP) harmonization and related systems integration activities across its operations.

Management currently expects future research and development expenditure to approximate 2% to 5% ⁴⁴ of total revenues annually. The company has no current plans to start paying dividends in the near term. The Refinancing Amendment provides for a revolving credit facility in an aggregate principal amount of $250.0 million ⁴⁵, against which $100.0 million ⁴⁶ has been drawn. The 2025 Term Loans are in an aggregate principal amount of $450.0 million ⁴⁷ and will mature on April 4, 2030.

Tariffs and other trade measures have increased and may continue to increase material input costs, and the company does not expect to be able to fully mitigate the impact of these increased costs or pass price increases on to customers. New and increased tariffs as well as uncertainty regarding global trade policies have also contributed to softened demand for certain products, and these factors are expected to continue to negatively impact results of operations and financial condition in the near term. The conflict between Russia and Ukraine and the conflict in the Middle East have contributed to volatility in global energy markets, including increases in oil prices, which may increase transportation and shipping costs. The company continues to monitor the impact of these conflicts.

The pending sale of the Genomics business is subject to risks and uncertainties, including the possibility that the transaction may not be completed on the anticipated timeline or at all. In July 2026, the ACCC and NZCC each announced they are moving their respective reviews into the second phase of review. If the transaction fails to close, or if closing is significantly delayed, the company may not realize the anticipated benefits of the sale and may experience management distraction, employee uncertainty, customer disruption, and reputational harm. The company also faces risks related to the successful transition of Petrifilm manufacturing from 3M to Neogen, with substantial completion of the manufacturing transition currently expected to occur in fiscal year 2027, and the company expects to continue incurring duplicative costs during the transition period.

The company may not realize the anticipated financial and other benefits from the 3M Food Safety merger transaction, particularly due to challenges in the transition of Petrifilm manufacturing from 3M to Neogen, with substantial completion currently expected in fiscal year 2027 and duplicative costs continuing during the transition period. Tariffs and other trade measures have increased material input costs, and the company does not expect to fully mitigate these increased costs or pass price increases to customers, with new and increased tariffs also contributing to softened demand for certain products. The pending sale of the Genomics business to Zoetis for $160.0 million ⁴⁸ is subject to regulatory approvals, including second-phase reviews by the ACCC and NZCC, and there can be no assurance the transaction will be completed on the anticipated timeline or at all. The company has incurred substantial indebtedness, including $450.0 million ⁴⁹ in 2025 Term Loans and $250.0 million ⁵⁰ in revolving credit facility capacity, with $100.0 million ⁵¹ drawn, and a violation of financial or other covenants could permit acceleration of repayment. The company is dependent on the agricultural marketplace, which is cyclical and affected by factors outside its control including weather conditions, changes in consumption patterns, and commodity prices.

Management's message emphasizes the company's mission to be the leading company in fueling a brighter future for global food and animal safety and security. The growth strategy consists of four elements: increasing sales of existing products, introducing innovative products and services, growing international sales, and acquiring businesses and forming strategic alliances. Management believes the company has been historically successful at increasing product sales organically, including international growth, and maintains an active business development program to identify and capitalize on opportunities to acquire new products, businesses or technology. Management expects that a number of new and improved diagnostic tests and other complementary products for both the Food Safety and Animal Safety markets will be commercially available at various times during fiscal years 2027 and 2028. Management currently expects future research and development expenditure to approximate 2% to 5% ⁵² of total revenues annually. Management believes the company is on track to manufacture sellable Petrifilm product and begin its planned multi-quarter manufacturing transition of Petrifilm to its Lansing manufacturing site beginning in fiscal year 2027. Management believes current output of primary product lines could be increased using current space available, though doing so would require investment in additional equipment and personnel.