Neogen Corporation (NASDAQ:NEOG) Q3 2023 Earnings Call Transcript

David Westenberg : Got it. No, really helpful, and then maybe just along those lines, can you talk about some of the maybe integration and some of the cost savings? I don’t know if you’re ready to quantify some of the integration of distribution. And maybe faster than expected manufacturing on what this could look like in terms of timing and speed. I know, you did reiterate the long term guidance. So I mean, I’m guessing — I don’t know if this is — maybe you can talk about linear versus exponential. I mean, what are we talking about in terms of some of that cost savings in the near term or integration savings?

John Adent: David, in the near term, I think what you’ve heard us talk about is having to build up some costs. So we’ll have some duplicate costs, where we’re paying our partners and their various forms of transition services, where we’re building up the cost to come off. And one of the things I think we will do here at a point in the future, I think, when we have a little better fidelity into the timing of that is to help characterize some of that a little bit, and what it means kind of over time. But I’m not prepared to do that now. But we do think that we’ll be able to gain efficiencies once we’re through building up the cost of transition services, to be able to bring these products into our existing processes. We think there’s efficiency over time with that.

David Westenberg : Got you. And then you may well just end with, one of the maybe fun long term, positive kind of stories. Can you talk about how the data from farm to table strategy? I mean, I think over the — traditionally, it’s been really hard to get these companies to understand the importance of really the food chain, so to speak, or going down the food chain. What does that strategy look like to finally get that dream that we’ve talked about for years for that full down the farm to table stream?

John Adent: Sure, thanks, David. Yeah, I mean, look of course, is what we’re doing now, right, starting with our analytics platform. And what that platform does is allows us to work with our key customers in the food manufacturing to help them modernize and digitize our environmental plant mapping policies and procedures, right. So it’s a suite of products around environmental plant mapping, around benchmarking, around predictive analytics, and we continue to develop new suites for that offering to be able to show customers the things that we can do to help them connect. Now the more we add in the ecosystem, the easier we are to then connect the ecosystem. We already have our blockchain solution. We can take — one of our customers, you buy their steak in a supermarket and you take a sample and send it to me, I can tell you, every place that animal went, everything it ate, every time it was sick, every medicine that was given, all the way from birth to your dinner plate.

Again, Neogen tends to lead the industry. So while we have that capability, and we see that, we don’t see a huge demand for that, because right now the question is who’s going to pay for it? The rancher says, well that should be the processor. The processor says well that should be the grocer. The grocer says well that should be the consumer. So — but at some point, we know that we have the ability to tie that all together that nobody else has. So we’re continuing to drive the solutions forward. Because we know this will happen. This happened just like with our genomics business. We bought the genomics business over a decade ago, everybody said we don’t need genomics. I can look at that animal and tell you how it’s going to grow. And now you’ve seen the whole industry has changed in the decade.