Subbu Nambi's questions to NEOGEN (NEOG) leadership • Q1 2026
Question
Subbu Nambi asked about the timeline for the new CEO to outline his vision and for the company to shift to an offensive strategy, whether Q1 revenue included any one-time or pull-forward effects, and the underlying margin and cash generation potential of the business. He also sought clarification on the confidence in the Petrifilm duplicative cost guide and the nature of sample collection inefficiencies.
Answer
Mike Nassif (CEO, Neogen) indicated a more detailed vision would be shared in early calendar year 2026, with immediate focus on quick wins for growth and cost management. Dave Naemura (CFO, Neogen) confirmed no one-timers in Q1 revenue and expressed confidence in the $15 million Petrifilm duplicative cost guide. He explained that margin expansion is supported by robust incremental margins and portfolio improvements, despite Q1's negative free cash flow due to high CapEx and inventory challenges. He clarified that backorder reduction was specific to sample collection, while excess spoilage relates to broader S&OP issues, and sample collection inefficiencies stem from scrap, quality flags, and excess production costs.