Neogen Corporation

Good day and welcome to the Neogen Third Quarter Fiscal Year 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note today's event is being recorded. And now let's turn the conference over to Bill Wilkie, Head of Investor Relations. Please go ahead.

Thank you for joining us this morning for the discussion of the results of the third quarter of our 2023 fiscal year. I'll briefly cover the non-GAAP and forward-looking language before passing the call over to our CEO, John Aident, who will be followed by our CFO, Dave Nomura. Before the market opened today, we published our third 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 two 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.

Good morning, everyone, and welcome to our earnings call covering the third quarter of our fiscal 2023 year. We're pleased to be with you today to provide an update on our performance and the ongoing integration of the food safety business we acquired from 3M last year. On our last earnings call, I mentioned the trend we were seeing in some of our macro related softenings in our end markets. This continued in the third quarter, with many food producers seeing lower unit volumes, with inflationary pressure on consumers being a key driver. On the animal safety side of our business, the macro weakening was driven primarily by a difficult comparison against extremely strong market growth in Q3 of the last fiscal year, and some destocking by our channel partners. Despite the macro headwinds, we delivered core growth in both legacy segments, aided by our diversification across product categories. In a recently added food safety business, key product lines continue to be negatively impacted by the backlog situation, at our transition manufacturing partner. After an unanticipated holiday shutdown in December, we've seen intermittent improvement, but not the sustained progress we expected. To resolve this, we've elevated it to the highest levels of our contract manufacturer, where we've seen meaningful engagement to address the root causes and alleviate certain process constraints. We're working with them to provide additional input into key production decisions and believe they have a path to successful resolution over the coming quarters. As we've discussed before, the Forma 3 in business is a high-quality franchise with leading diagnostic technology for high replenishment environments that in many cases is specced into their quality control processes. We understand the critical roles our products play and are working closely with our customers to fulfill as much of their demand as possible while we work to return supply to its more normal levels. With respect to the ongoing combination of the businesses, we continue to make good progress on the integration activities. Commercially, our teams have been combined and cross-trained and are navigating the tighter market conditions focused on a prioritized set of opportunities globally. We've seen significant growth in the sales pipeline over the last few months and are excited about the potential ahead. Additionally, we opened our new distribution center in Mount Sterling, KY, which will be our primary point of distribution in the U.S. for the combined business, allowing us to serve our customers more efficiently from a single location. We'll also continue to make progress scaling up the infrastructure we need to fully accommodate the former three in business within the engine. The new facility we're building in Lansing ultimately will house the production currently handled by our transition manufacturing partner. Construction is progressing on track. The foundation is being poured, Sections of the frame are starting to go up, and the customized equipment has already been ordered. Additionally, our ERP implementation for the combined business is well underway, with completion on schedule for the end of calendar 2023. And finally, we continue to add critical personnel in the quarter, with additions to our back office and related support teams, which play a key role in enabling our exit from the transition services agreements currently in place. Clearly, there is more work to do. but we remain very excited by the opportunities, the addition of such a high-quality business, and the contributions we've seen from our new employees who are now part of our One NIAGEN team. With that, I'll turn the call over to Dave for some more insights into our results for the quarter.