Welcome to the Fourth Quarter and Year-End Fiscal Year 2015 Earnings Results Conference Call. My name is Chris and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Jim Herbert, CEO. Mr. Herbert, you may begin.

Thanks Chris and good morning and welcome to our regular quarterly conference call for investors and analysts. As Chris said today we'll be reporting to you on the results of our Fourth quarter and of course also the fiscal year that ended both on May 31. I'll remind you that some of the statements that are made here today could be termed as forward-looking statements, and these forward-looking statements of course, are subject to certain risk and uncertainties and the actual results might differ from those that we discuss here today. These risks that are associated with our business are covered in part in the Company's Form 10-K that’s filed with the Securities and Exchange Commission. In addition, to those of you who are joining us by live telephone conference this morning, I would also welcome those who may be joined by simulcast on the World Wide Web. Following comments this morning, we'll entertain questions from participants who are joined by the live call and I’m joined today by Rick Calk, Neogen’s Chief Operating Officer, and Steve Quinlan, Neogen’s Chief Financial Officer. Earlier today, Neogen issued a press release announcing the results of its fourth quarter and year end. Looking first at that fourth quarter revenues $78.6 million that’s a 17% increase over revenues for the same period last year. Income for the fourth quarter was approximately $9.4 million that’s up a nice 25% over the same quarter in fiscal 2014. This equates on per share basis to $0.25 a share comparing to $7.5 million last year or $0.20 a share so up a full nickel per share for the fourth quarter. Revenues for the full 2015 fiscal year increased 14% to $283 million that’s up over the $247 million for last year’s FY 2014. Net income for the year…

Well, thank you Jim and welcome to everyone listening on the conference call as well as those joining via the internet. Jim has already reported on the overall sales and profit performance for our 2015 fiscal year and our press release issued earlier today provided additional details related to Neogen’s 2015 results. This morning I’ll provide a bit more detail on the year’s performance from an operational and a product perspective. In many cases our 2015 fiscal year was a continuation of the success of certain products and services from previous years as Jim has mentioned. For example, last year at this time we reported a 21% of increase in sales of our food allergen test kits over the prior year and building on that growth this year we’re reporting an 18% increase in sales of food allergen test kits. We were very excited to launch of a new test kits for multi-tree nuts in March, but this significant increase of 18% came in large part from the greater use of our complete line of allergen testing products. The growing demand of our products is a result of more educated, global consumer purchasing food and beverage products verified to be free of allergens such as gluten, peanuts and soy. This consumer demand is led the government and regulatory agencies in the U.S., Europe and elsewhere to increasingly create and revise regulations, labeling laws that might be present for the food and beverage industry that dedicate maximum allowable allergen residues in food products. This in turn continues to help drive increased usage of our testing products. It’s unfortunate that each year one in six people in the United Sates is sickened by food borne illness. Food borne pathogens impose over a $15.5 billion economic burden on the U.S. public each year…

Thanks, Rick. As you could tell, Rick had more accomplishments and he had time to present this morning. We’ll share a little bit of that with Steve Quinlan, his staff. It’s interesting staff for our staff, accounting, finance and administrative side of the business had few more challenges this year than normal particularly from the outside is we have looked at what was happening to the markets around the world as we become bigger. So Steve I want you to talk a bit about around currencies, so talk a bit about that and some of the financial outlay to the year we just finished?

All right, thanks Jim. I think clearly tell them listening to Rick’s comments they were excited to talk about some of the operational teams we made in 2015 which helped to make the year a solid one and which bode well for the future. As Jim indicated, the company gained momentum all year finishing with the 17% increase in revenues in the fourth quarter were up overall 14% for the year overall. Now we were able to achieve these results despite the considerable currency headwinds we encountered during the year, which accelerated into the fourth quarter, all the currencies the company operates and declined against the dollar, the Euro was down 21% compared to last year’s fourth quarter and 9% on average for the year. The Real was down 27% for the comparative quarter and 11% on average for the full year and the Peso was 14% in the fourth quarter than the same period last year and down 8% for the full year. The Pound Sterling was relatively flat for the year but was 10% lower in the fourth quarter of 2015 than it was for the fourth quarter of 2014. The negative impact of the stronger dollar on our comparative revenues for the full year was $3.6 million and currency translation losses included in our other income and expense from balance sheet translations was a $1.1 million in 2015 making our 2015 results that much more impressive. On the last quarterly call, we talked about increasing our hedging program to help mitigate some of the currency risk and we have taken steps to do just that. Although it is important to understand that we are lessening the currency impact not eliminating it. The Food Safety segment had a solid year with overall revenues of $131.5 million representing growth…

Thanks, Steve. Let me wrap up here in just the next few minutes and talk briefly about some of things that, other things that make fiscal year 2016 look pretty exciting. There would be lot of continued strong activity on the Animal Safety side. It’d be primarily aimed at foods safety back inside the pharm gate and raised without antibiotics is a term that you will continue to hear more and more. The significant portion of our population that believes that antibiotic resistant bacteria on the human medicine side as a result of heavy antibiotic feeding to food animals and the dead residue has entered in the food chain, the human food chain. Through or not, it’s going to get more attention. First will come chicken. I think all of the major broiler producers except perhaps one or two have already committed to their customers that they will be moving toward production of a substantial portion of their chicken meat without the use of antibiotics. This means that we’d like to do a better job of management on the poultry side, throughout the hatcheries, the feed mills, that grow-out houses and the processing plants. If they are going to be able to protect these animals from disease, Neogen’s strong program of biosecurity is clear answer. Our cleaners, disinfectants, rodenticides, and insecticides are the strong support tools, it prevent the spread of disease and replace that once clutch of antibiotics. Our diagnostic test that effect the presence of antibiotics will also help to make sure that a wrong truck didn’t go to the wrong farm and deliver medicated feeds and antibiotics in it or that a flock chicken has actually can actually be tested before processing to make certain antibiotics didn’t inadvertently get introduced or maybe even to prove to the…

[Operator Instructions] And our first question comes from Brian Weinstein from William Blair. Your line is open. Please go ahead.

Hi good morning, thanks for taking the questions, starting quickly on gross margin what do you see as kind of the primary puts and takes in FY 2016 is it reasonable to think that gross margins can be 50% next year and what we really have to kind of push them one way or the other significantly?

Well I will let Steve give you the financial answer, but let me give you the hardest, as you know Brian we continue to say don’t judge based on what gross margins do, gross margin is just one of the contributors to operating profit and we will still be pushing towards that 20% of sales and operating profit, some of the gross margins stuff for instance that I have talked about in my comments may not be - may be a detractor from that 50%, but there is nothing below on this in a way of operating expenses it is going to be very important. So that is important when we get to the bottom line, so I look at gross margins and they vary from month-to-month, it always depend on which growth, which products are in there, how they might be skewed one way or another but I just kind of look at gross margins is one of the indicators of what we’re doing with operating profits. Steve do you think to add to that?

No I would agree with everything you said and I think it’s important to know that our animal safety gross margins expanded nicely in 2015, 2015 food safety margins were hit by currency and to the extent that the currency comparative ease we should see some expansion possibly there and then it is all about product mix. The Lansing diagnostics products in 2015 ended the year with strong momentum and if that continues into 2016 you should see a growth there on that side of the business. So I think gross margins of 50% are reasonable to expect.

Yes, Brian I can’t remember how you guys are looking at currency futures for the year earlier next 10 to 12 months but frankly we think that the dollar is still going to be strong compared to the currencies that we work in and as Steve said costs us the same amount of dollars to produce a product and if we end up selling it because of discounting currencies that has an impact, it is difficult to control.

Yes I appreciate that second question on the GeneSeek business had very strong growth obviously are there anything that you are seeing either from competitive standpoint or anything else that would kind of slowdown what we see in this sort of 25% to 30% kind of growth profile for the business going forward, anything on the horizon there?

Well I wouldn’t encourage you to use 27% to 30% as part of your growth model for next year, those are pretty difficult to maintain obviously. We do have a couple of competitors out there not in the board we are working in all areas of animal genomics, some of the major poultry breeders on a worldwide basis are customers or partners of ours, we do a lot of business in New Zealand and Australia and some of that goes to the sheep market where we do a lot of business on canine parentage a big piece of our business. All of those are strong and don’t suffer a lot of competition at just - you don’t want to be, you not ever gone get stay in the business very long and its good unless attracts some competitors, but we do have a one or two competitors that are in the mainline dairy and beef business that to be record with they make us think every morning when we get up, but I think we’re still are - not to say DON but I think we’re still in a leading position as it relates to is that side of our business, but please don’t build a model on 30%.

Understood, okay. Thanks so much.

Thank you Brian

And our next question comes from the Tony Brenner from Roth Capital Partners. Your line is open. Please go ahead.

Thank you. I have two questions regarding Neogen Europe which in the past typically has grown faster than your domestic business and last quarter its growth slowed somewhat. I wonder if you could elaborate on that and discuss may be what the outlook is and ex-currency?

As the question, Europe is - Neogen Europe is confounded by two sets of currency conversions. Neogen Europe are covers our domestic sales force in the countries as the UK, France and Germany and Holland and then they take care of distributors that are in the rest of the EU over there, independent distributors so we sell, they sell product in U.S. dollars some in Euro and some in Pound sterling. And they bring it all back in Tony as you may remember in consolidate it all into found sterling and they bring it over here and then - land takes it and converts it the U.S. and somewhere along the way sometimes I get kind of lost in that transaction, but we at the some portion of that percentage is gobbled up with some currency transactions. We've continued to grow well there, we’ve got good opportunities in all of those countries, I think we’ve got acquisition opportunities that will brining some new products and the acquisition opportunities for Europe, we’ve got just a great management team that - they wanted the management teams within the company but we probably don’t have them fully stretched out every day. So they’ve got an opportunity probably to pick some more management responsibilities with some additional road there . So its I think its looks good for the year ahead, it was confused on what by the currency confinement, but it has slowed up from that two years ago when we were up 25% over there, I think sometimes we get that’s what they call horse gate year that’s when we had lot of product that was contaminated with horse meat and we got some extra revenue result, but I needed to be very proud of that group and I think that make a good strong solid contribution going forward.

Okay. My second question regards the FSMA where you said the first week regulations will be published in the second half of the calendar year, want to discuss what those regulations pertained to when what product lines of your stay would most affect?

No, good question. Thanks. Yes the first ones is I call it one, as they may call it two, the final deadline, final rule printed on August 30th and one of those concerns what we would call around the USDA side has a program for human food and for animal food and this is first time the FDA has stepped quite so far back inside the farm gate on animal food. That’s going to require better record keeping, it’s going to require that a lot of these food processors recognizing in advance where they might have risk problem in the document, what they are going to do in case they do have a risk problem, those in turn then will be subject to investigation. Now or verification I should say by the FDA, but having said that, this will be final rule that will be out, but they will still have a year to go to get into compliance, so you know nothing moves fast seemingly in this part and then the small companies will even have more than a year. So it’s going to impact our business, but there won’t be a land slide which I guess maybe is good, we would be able to absorb it as fast as it grows. The ones that I think probably are going to be more important are the ones that come in at the end of October, one of those has to do with ports, a lot of imports have come in to the US, it’s owned and the people are responsible and the shippers after this rule goes into effect, it will be the receivers which will get rid of what we call port shopping, you could bring priority ownership in New Jersey and get turned down and they put…

Thank you, Jim.

Thank you.

And our next question comes from Paul Knight from Janney. Your line is open. Please, go ahead.

Hi, maybe this is a question for Steve and that is regarding the organic growth rate, I guess we know understand DNA testing, the rodenticides seem to have that rodent outbreak but what were the other big parts of the organic growth in the quarter, was it bacterial, was it dry culture? What were the other popular areas we should know?

Well, we talked about allergens, we’re up very strongly that’s a nice product line for us that was up 18%, we talked about genomics being strong. The rodenticides as you mentioned and pathogens were up very nicely in the quarter in the year, it’s almost across the board on the food safety side, on the animal safety side there were pockets of real strength and then underlying basic solid business on the pockets of strength there we what we kind of tried to highlight were the rodenticides the needles, the forensic test kits and the genomics on that side of the business.

The dry culture medium portion was up 32% with what’s within that?

Yes that in the fourth quarter in particular there was a very large sales of media internationally that drove kind of the fourth quarter numbers and but then contained within there are the genomics revenues that we are serving the Brazilian and Chinese markets internationally and those report under food safety, I’m sorry I forgot to mention Europe as well, so genomics in Europe, Brazil and China report in other under food safety because how we have to report but that’s the other driver for the big increase there.

Okay. And then lastly could you talk about the China’s strategy, I know Anapure has been acquired but what are next steps in that large market?

Yes. A part of that is a focus well first of all let’s look at China, China is working hard to get the quality of food for that population that they know they need is that middle-class is growing and the big part of that is animal proteins and the big part of the animal protein production is outstripping what China herself can do without some help. They bought the largest pork producer in the world when they bought Smithfield Foods. So we’ve got companies like that that are operating in China, we’ve got other major companies that have Tyson Foods is a major producer of poultry in China. [indiscernible] is a major producer over there, so you’ve got a number of companies that are producing animal proteins in China at the behest of the Chinese government but they have got their own brand to protect of course whereas Chinese company that’s operating in and out of a backyard and throwing dead hogs in the river is a different story. Our focus is on those big major operations, there will always be somebody over there who can produce a diagnostic test, it is little cheaper than ours may not be as good but we see that the major producer be they non-Asian companies or even Asian companies and China are demanding higher quality, they want really. We are doing business with three of the top five - I started to say maybe the top three, three of the top five dairy production companies in China. They’re getting very, very big, we’ve got operations in Mongolia now where they run in over 10,000 cows per farm to produce milk. So that’s a way to get away from the melamine problem where you had guys that were milking five cows and in a wheelbarrow. You’ve got now these major companies that are going in, these are Chinese companies with major installations to provide the quantity and quality of foods. So that is where our focus is, we probably pulled back a little bit and trying to be competitors with everybody but we look more and more into what we can do both food safety and animal safety, we are introducing some new - we will be introducing some new animal safety products, some of that will be a tie-in with what we are doing in India. So that is what I mentioned, we sharpened our strategy, that is a part of that of whole statement.

Okay. And then lastly Rick could you talk to the Biolumix contribution to revenue?

Yes I would be happy to I think Steve highlighted in what he said was that we had the addition of about $4 million in sales overall from the Biolumix acquisition over the nine months that we had that business. Thank you very much Jim and I think has some important fact we’ve been able to take that and by putting it into our supply chain and utilizing our very talented sales force been able to grow that business over the period as well.

Thank you.

[Operator Instructions] And our next question comes from Charles Huff from Craig Hallum. Your line is open. Please go ahead.

Hi, thanks for taking my questions and congratulations on a great fiscal year. I had a question for you about the Illumina distribution arrangement that you discussed in the press release for the GeneSeek genomic profiler for snips. Wondering if you can help us understand that arrangement little bit more is it international, domestic or any details you can provide will be very helpful. Thank you.

Sure. It’s basically international overtime we’ve got bio informatics, there is the testing in the test results in one gets from using a instrument platforms like Illumina to give you raw data but then that raw data is in needs to be converted through some bio informatics is says that’s good or bad or what degree of good or bad we know what all the sinps are for instance, they’re pretty much going to dictate much beefcake we would gain per day but once we get all of those factors then we have to put that some kind of a model. Over time our guys have developed what they called the GGGP and which its own bio informatics program its being used to help producers, use the right bull, say the right replacement efforts whether its own beef or whether its own dairy side. And obviously we’d like to do as much of that business through own lab as we could, but it’s a bigger world out there and we can’t quite cover everybody and everybody doesn’t want to seem product to air Scotland or to Lincoln, Nebraska. So in conversations with Illumina they said if we could, if you would allow us take license as to use your bio informatics on hard chip we could sell that as a part of a program it will help us increase our revenues that is Illumina for us, it gives people more reason to use the big Illumina machines in platform and at same time then it reaches the part of the market the Neogen GeneSeek people can’t reach for whatever reason. So we get obviously we get up some profit every time Illumina cells of chip is got bio informatics on it we get a little piece of that but probably more important is are located is where to take this tool is we continue to develop and make it stronger and stronger to the benefit of particularly beef and dairy production around the world it we can’t be everywhere all the time but it’s nice to see that, will be nice to see the more and more people are using genomics and to extent, as Rick currently used to say, raising tide raises all the ships and I think it’s in this program we’ve taken about here.

Okay, that’s very helpful. Thanks Jim. Wondering about penetration rate, that you think about these bio informatics products in snip arrays and internationally in the market where Illumina is in versus domestically, do you think the penetration rates are dramatically much lower internationally versus domestically or how should we kind of think about that in terms of the opportunity that Illumina and I guess you guys have internationally relative to what you think have domestically?

Yes, I think for Neogen GeneSeek program the international markets will be more lucrative than the domestic markets and that’s we’re getting the big piece of that now. We’ve got for instance of the breed associations on the beef side, you’ve got [indiscernible] Angus and all of those I think all but perhaps two we do exclusively their work so all of the presence the work for practice in determining on the pure bred side for Alfred we do that genomics for them and then it goes back to them and to their association. We don’t have a 100% of Angus business but I think that’s probably the - maybe that in American Braemar, we don’t want to have all of that one. But we are ready there domestically that’s just as an indication of we’ve already got a big piece of the domestic market. So international market is ___ end, it will help us develop better models. We’ve got models that are developed mostly today for Bos taurus that’s the English breed cattle versus Bos indicus which is the indicus [indiscernible] Zebu type cattle and we’ve got some good models particularly for Brazil but we don’t have a model that’s really developed for some of those other areas. So a feedback or some of that will eventually help us develop more models in those countries were maybe our bio informatics is not as precise as we would like for it to be.

It’s great. Another question I have is on Brazil, so you mentioned in the prepared remarks that in the second half of this fiscal year Brazil started to get some traction and I know the first half was a little bit challenged and you guys were building some infrastructure down there and just wondered if you could kind of characterize Brazil now, you kind of out of the words I mean excluding the currency of course, are you kind of out of the words and you think you expect progress going forward or are there still some road blocks that you see?

Well, we expect progress going forward and I think there are still some road blocks out there. Brazil has done a great job of protecting, continue to protect their own industries. So depending on what we are shipping into Brazil, the Terrace, I guess Steve up towards 17% on some stuff. So we produced a dealership down there, we pay 17% more on our cost than a local guy would is producing it domestically. We understand that , the part of our challenge is to produce more product in country and that’s particularly through cleaners and disinfectants not bigger products that we’re working on now. We’re making some progress, we are not there yet, we think we knew how to get there. And but I think them Brazil just gets to be a bigger factor in the entire food supplier to the world already the largest are being producer fighting for the number ones lot of spots producing most chicken meat not only they are doing it in Brazil but JPS comes to the U.S. and buys up companies here. So there the - I don’t know where they ranked now, third or fourth largest broiler producer in the United States is owned by the Brazilians. So making sure that we have good solid footing in Brazil is important to us. But don’t know that anybody is ahead of us but we are still working on a daily basis to make sure we are structured right which could [indiscernible] conditions grow I guess it’s harder to predict the right growth.

Okay. Great. I know this has been a long call, so I just have one more Sanostec and ContraPest, wondered if you could give us an update there I know there’s been a leadership change at Sanostec just wondering what the status is maybe with the EPA as far as you understand it and where your expectations are in terms of being able to commercialize ContraPest.

Yes. Thank you. To refresh the audience, it might not be familiar. We have a license to a technology that was developed by some scientists of the University of Arizona that will sterilize rats and mice particular rats. So that they can continue to reproduce. We don’t own the technology, we’ve got a license to the technology should it - when it gets approved by the EPA I think that they were filed an EPA application, I think at the end of last week whether that got hold on filed, I don’t have any confirmation so. But that’s just an application, which could be a long ways from application to approval. It is a different kind of product that EPA hasn’t had all of much experience with, most of what they have experienced with is something kills something, not something that alters its ability to reproduce, that’s where it’s cleaners and disinfectants or rodenticide or insecticides, those are all aimed at killing something which is most of what they look at. I really can’t tell you I mean we hope that they are successful, we don’t really have anything other than being a cheering section for them to get further to where they are. So in the mean time, we’ve got a great program going of our own, you maybe remember that we’ve got rodenticide laboratory special research facilities that’s located in our Randolph, Wisconsin facility and we're continually working on new rodenticides there, we’ve got I think two or three before EPA now for approval, I suspect that we are getting approval on a new liquid bait hopefully here within the next month or so that will have we think a breed application, be competitive over other things that are available in controlling rodents particularly in feed mills. Most of the places remember where we try to kill rodents is already a clinical supply of food, so they’ve got all kinds of choices to what they're going to eat so we have got to convinced them to eat our poison instead of eating that corn. So a lot of work is done in that regard. So Sanostec that is new report I think.

And in terms of the bait forms I think you guys have been working on those for the past year, so do you feel like your group has kind of figured out the bait forms for ContraPest now?

Well the bait forms really that is ContraPest is they are working to my knowledge it is all liquid bait, which can be good but we haven’t done any work on our side as far as testing any bait forms or anything to - no active input it all there.

Okay. Thanks for taking my questions.

You bet. End of Q&A

We have no further questions. And at this time, I would like to turn the call over to Mr. Herbert for closing remarks.

Well thank you so much. Thank you so much not just for the day but you could tell I think most people the caliber of questions there are a lot of people who have been awful close to what we’ve done for the last year and we appreciate your support, we appreciate the advice that you’ve given us along the way. I would make sure to invite you, if you got the invitation remember to come, if you didn't you can come anyway to our summer picnic that starts on Thursday afternoon here at company headquarters beginning about 4’O clock. The weather has promised to be sunny, the beer cold and the barbecue good and we'll get an opportunity to talk with you first throughout the evening with some exhibits, we will have County fair time. We will have exhibits up of a lot of a different products and the people that are out there with them everybody and we always enjoyed doing that. So if you can get here please do, if you need instructions call Terry Maynard but consider yourself invited. So thank you again and a good day.

Thank you, ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect.