Welcome to the Fourth Quarter and 2018 Year-End Earnings Call. My name is John and I'll be your operator for today's call. At this time, all participants are on a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note the conference is being recorded. And I will now turn the call over to Jim Herbert.

Thanks, John, and good morning and welcome to our regular quarterly conference call for investors and analysts. And this time, we'll be able to report to you not just the fourth quarter, but more importantly the Company's year-end which you'll likely remember was May 31. And 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 some risks and uncertainties. Actual results may differ from those that we discuss today. And the risks that are associated with our business are covered in part in the Company's Form 10-K as filed with the Securities and Exchange Commission. In addition to those of you who are joining us by live conference, I'd also welcome those who are joined by way of simulcast on the World Wide Web. Following comments this morning, we'll entertain questions from participants who've joined this live conference. And I'm joined today by Steve Quinlan, Neogen's Chief Financial Officer, and John Adent, Neogen's Chief Executive Officer. I've been a bit excited over the past several weeks waiting for this opportunity to give you the good news of another great year. Earlier today, Neogen issued a press release, announcing the results of our fourth quarter that ended on May 31 and at 2018 fiscal year. Net revenue for the fourth quarter came in at approximately $109.3 million. It's up about 11% compared to last year's fourth quarter that came in at about $98.8 million. Net income for the quarter increased 41% to $17.5 million. This equals $0.33 per diluted share, and that compares to $0.24 in last year's fourth quarter. It was a good quarter, but more importantly, it capped off what I termed to be a great year. Revenues for our…

Sure. Thank you, Jim, and good morning everyone listening. Oddly enough, today marks my one-year anniversary of joining Neogen as its CEO. And over the past years, I've taken in the full extent of our operations. I've become even more enthusiastic and excited about Neogen's growth potential. Neogen has produced an incredible record of growth, while at the same time, solidifying and expanding the Company's foundation to allow for even more growth going forward. I look forward to reporting to you what we can achieve in the years to come. Jim's already reported on the overall sales and profit performance for our fourth quarter, as well as our entire 2018 fiscal year. I want to provide a little more detail on the performance of our food and animal safety segments, as well as offer some perspective. Our Food Safety segment revenues were approximately $176 million for our 2018 fiscal year, an increase of 14% compared to the prior year. Highlights for the year include sales of our BetaStar test to detect antibiotics in milk, which increased 13% from the strong sales in the Eastern Europe. These new sales were the result of our ability to develop this test specifically to detect the antibiotics of special concern for that market which are beta-lactams, tetracyclines, chloramphenicol and streptomycin. Sales of our Acumedia and Lab M culture media product lines increased 19% for the year, and reflected increases in sales to both our food safety customers and traditional buyers of media. Jim's going to come back and expand on some of our recent changes to our culture media business in his further comments. Other highlights from our Food Safety segment for the year include an 18% increase in sales of our general sanitation product line which features AccuPoint Advanced. As you know, that's…

Thanks, John. As both Jim and John have noted, we had a solid quarter and year, with results aided by the U.S. tax reform enacted last December. The reform lowered the statutory federal income tax rate from 35% to 21%. For our 2018 fiscal year tax provision, we used a blended statutory rate of 29%, which is simply the weighted average of the 35% rate in effect through December and the 21% rate for the remainder of the year. We also revalued the net deferred tax assets and liabilities on the balance sheet down to 21% as of May 31st, and this resulted in a gain of $6 million for the year. Going the other way, the mandatory transition tax or repatriation tax on our foreign earnings resulted in a net tax charge of approximately $1.2 million for the year. Now, unrelated to the tax reform, we also recognized a $4.8 million reduction in income tax expense due to a new accounting standard adopted this year related to excess tax benefits from the exercise of stock options, and recognized a $1 million credit income tax expense due to the successful conclusion of an IRS audit of the Company this year. The net result of all these adjustments is approximately $11 million of lower tax for the year or $0.21 per share. The favorable impact of these adjustments was about $3.3 million in the fourth quarter or $0.06 a share. Effective with the first quarter of fiscal 2019, federal income taxes will be calculated off the new 21% statutory rate. Our gross margins were 45.4% for the quarter compared to 47.6% in the fourth quarter last year and, as Jim mentioned, were 47.3% and, as Jim mentioned, were 47.3%for the full year, and this compares to 47.6% for the full year…

Thanks, John and Steve, for catching everybody up on the highlights of the 2018 year. Now, what are we looking at going forward? Well, frankly, our playing field looks a little bit cluttered right now. However, let me quickly add that this comment is not coming in the form of an excuse. But I think you ought to be aware of a few things that are going on out there. Here are some of those highlights. We ought to get a new farm bill sometime next month. Both the Senate and the House have approved the bill, and that must go to the committee to consolidate it. In fact, I talked with Senator Stabenow yesterday, the Minority Chairman of the House – of the Senate Ag Committee, and she and Chairman Roberts were both pretty optimistic that they'd get through this committee resolution pretty quick. There is a move under way by the administration to pull certain portions of food safety and food inspection from the Food and Drug Administration and put it over to the Department of Agriculture, that Ag has the majority of the responsibility of the food we eat. No way to predict what might happen there, but it's interesting. Of course, tariffs are going to be a big concern. And we could get caught a little on that one, though there is noise coming from several countries including Mexico and Canada. Probably, the biggest ripple on tariffs is in China. China has imported a very significant portion of the U.S. soybean crop for the past few years. This anticipation of tariffs has forced the soybean prices on the U.S. futures market down to the lowest they've been in 10 years. Interestingly, this comes in the face of U.S. farmers planting more acreage to soybeans this year…

[Operator Instructions] And our first question is from Kevin Ellich from Craig-Hallum.

Good morning. Thanks for taking the questions. I guess starting off, Steve, we didn't get the organic growth number. Could you give that to us, please?

Sure. The overall organic growth for the company was almost 9%.

Okay. And then, how much did FX impact you this quarter?

Kevin, I'm sorry. I gave you the fourth quarter number there. So it was 9% for the quarter, 8% for the year.

Yes. Okay.

Okay.

And then FX impact?

Give me a second here. So without the FX, it was about 7.5% for the quarter and about 6.7% for the year.

And I think all of you heard my comment. I can't just let it pass, but what’s organic what isn’t. We back up just doing $2 million. We voted in and we turned it over to our folks and it goes to $4 million. We got the $4 million is by acquisition, but $2 million that’s became because we were already in that marketplace. So I think it's an interesting metric but certainly not. So I think it's an interesting metric but certainly not telling as far as future growth is concerned. You hadn’t heard that speech before; you’ve heard it again.

And then gross margin in the fiscal fourth quarter and looks like it pulled back 200 basis points year-over-year and sequentially. Wondering what's going on there, and is this a trend you expect to continue, or is this going to turn around and what would turn that around?

No, it won't continue. I mean, again, one of my other favorite speeches is don't judge us on gross margins. Judge us on net operating profits because sometimes we can have a low gross margin product but has no other expenses attached to it so it ends up being a high net operating product. But as we integrate - we integrated several new businesses this year. Some of the gross margins on that is due to accounting changes. For instance, you bring in a company, you put in – you value the inventories based on what the prior market value of those inventories are at the time you produce them when you acquired them. That might be 30% greater than what you're going to produce them for. But nevertheless, that figure is in your gross margin as you go forward. So, we had a little bit of that, was the impact and issue. I'm trying to sound like an accountant. Let me turn that over to Steve, let him comment more meaningful. Steve?

So, Kevin, so in the fourth quarter, we had a couple of what I would call one-off kind of sales. We had a large tender in Brazil with our Rogama business. We had some significant sales in our Acumedia business that were larger and lower gross margins or gross margin business. And then as Jim talked about in his comments, we've got to do a little better job on our raw material purchasing, particularly as it relates to our cleaner and disinfectant business. We have opportunities for improvement there, and that’s primarily in the Quat-Chem business in England, and we are making improvements there. But that really explains kind of the lower gross margin in the fourth quarter. We also had lower mycotoxin sales in that quarter, which also impacted the overall mix of our products in the fourth quarter, kind of drove that number. But moving forward into fiscal 2019, we see margins -- gross margins coming back to kind of what I would look at as this year kind of margins.

Okay. With full year, so like 47.3%?

Yeah. I'm not going to be that specific but, yes, those kind of numbers, yes.

And then, lastly, it looks like the international - last quarter Brazil was down a little bit for you while year-to-date growth was still up 12%. Have you continued to see the competition and some of the things that has slowed that growth down a little bit, John?

No. I think one of the things I heard is last quarter in Brazil was, we're getting to the end of the quarter and they had a trucking strike. And that really kind of tapped us there. We had products in hand and orders in hand and we couldn't get out. So, we had animals that couldn’t get to slaughter. And so that really hurt us a little bit on that piece, Kevin. But, no, I think when we look internationally and you look at our growth going forward, we've got great opportunity to continue to grow across all those markets, and we're really focused on in developing those business plans to make sure that to Jim's point, continuing to grow market share in the markets that we serve, bringing new products to those markets. We brought a new product in Brazil on the dairy side that the guys took and hit with the ground. They hit the ground running and really made great strides. So, I'm really optimistic about the international opportunities going forward.

Our next question is from David Stratton from Great Lakes Review.

When I look at your R&D expenditure, it seem to be, compared to the full year, a little bit soft in this quarter. Is there any reason behind that or any change in strategy regarding your R&D?

No. We budget R&D because we have to, because we need to. But quite honestly, we spend money where it's needed and where we have opportunities. And it doesn't bother me if R&D budgets are actually around 10% over what we budgeted. By the same token, we budgeted I think this year for a number of approvals that with all of our approvals for third parties whether they're governmental approvals or whether they’re things like AUAC or things like that, those run through our R&D budgets. And I know we had expected to spend a little more money on those than we really did. That was partially because we didn't need to. But I think we're clearly focused on -- we've got our hands in the marketplace. We think we know -- I always like to borrow Bill Gates' comment, don't sell people what they want. Sell them what they want they knew was available. And we’re always reaching out there to do that. We've got several good products that are in the pipeline that are really expected going to be big barn burners this year. One or two have been slipped out, probably got them kind of in the marketplace in the fourth quarter. But I think there's no change in R&D philosophy. We run some major R&D activities. Most of it is located here in Lansing, but we also run R&D on how to develop better rodenticides. That goes through our Wisconsin operation. We got a pretty sizeable operation of R&D guys in Ayr, Scotland because they're better in tune to what EU is going to need. So we operate from there. So we’re doing the same thing with our Acumedia products that we’ve got the whole team over in the U.K. that are working on some really good stuff. So I think it's very valuable and it will continue to go forward, but thank you for the question.

And then, any insight you guys could give us on the ThyroKare? How is that trending? Do you have any anticipated date when you could be back in that market?

Yes, we're hoping -- knock on wood, we hope we're coming down the homestretch. We've seen really good progress and what we're doing now is we’ll just make sure that we're following the final steps for us to make sure that we get approval for that product. I don't have a specific date because unfortunately, I can't predict what the agencies are going to do with those timelines but we are looking forward to bringing that product back to market.

And when you do, will that be the same size of the business as what left or will it be smaller or larger? Just kind of what planning…

Well, it’ll be – and the business will be larger -- but we’re going to have to take it away from a competitor. So, we’re – he had that market by himself, so we’re going to have to take some of it back.

Our next question is from Brian Weinstein from William Blair.

So we'd start maybe with John. John, as you've been in now a year, you had talked initially about – and I think that you even made some comments about this as well as John being able to focus on some areas that maybe weren't getting as much attention previously. So, I'm curious about some of the specific projects, John, that you're working on at this point and some of the operational progress that you've been able to drive in your 12 months there at this point.

Sure. I think a lot of them aren't different than what Jim had already looked at. It's just now having people and myself to help go do that. I think one of my biggest challenges, Brian, is keeping up with Jim. He continues to work me into the ground, and it's quite embarrassing for somebody my age to continue to have to shovel as fast as he does. But some of the big things we're looking at that we saw was we put in place our new process and how we go to market and how we manage our sales team. So, the way in which we look at customer interactions, the way in which we're looking at metrics and close rates, prospecting, we think that's going to pay dividends going forward. That's just a way for us to continue to drive. I think the other on key projects, we talked a little bit about pricing. We've got some arms around costs that Steve talked about. We've done some projects where we've consolidated our buying, and we saw a significant ability to leverage our size. And as we see that and see those types of results, now what we're doing is, okay, what's the next? So, we're lining them up and trying to knock them out to find ways that we're going to improve our cost of goods position as we continue to grow and we leverage our size and scale across the world. So, those are two really big ones. There's a bunch on my list, but those are two big ones that I'm focused on.

Got it. Thanks for that. And then going back to the operating margin discussion, there's been a lot of talk about the 20% that you guys target, and you've made a lot of comments on it over numerous earnings calls. But if we look back to where operating margin was, let's say a decade ago, you were sitting right around 18%. You're still right around 18%. So just wanted just to get an understanding of kind of a commitment to growth of operating margin and whether or not the 20% is still the right place to think about for you guys longer term or are there things that you can do that maybe accelerate that even faster? You highlighted a couple of them. But I guess really the point of the question is, the commitment to the growth in operating margin is what I want to try and get a better handle on. Thanks.

Well, let me start the answer to that question and then let John finish it. First of all, it's a goal and if you don't have a goal discussed and in reaching, it's hardly a goal. So, we're not at 20%, but that doesn't mean we ought to be lazy and pull it back down to whatever we've been accomplishing. So, the goal remains 20%. We've got a lot of divisions within the Company that work every day to get that 20% and I gave you two examples of two operating divisions that we've now merged, a jump beyond, our genomics jumped from about 17% to 21%. And they talked about that every day. So, if we see that as a goal for the Company, I'll let John talk about whether he thinks it ought to continue to be a goal, but I think it's worked at this point, and I think our goal will always be little bit ahead of what we're achieving.

And, Brian, I agree. I think it's a great goal and it's something I'm definitely focused on for the company going forward to expand operating margins. I think at the same time, you want to make sure that you're balancing that because we could get the 20% operating margin today if we stop growth and investment. If we say, okay, I'm not going to invest in new salespeople, I'm not going to invest in new development, I can squeeze it but I don't think that's a good term. The real trick is to continue to have a high growth rate and increase the spread on the operating margin which is what we're going to try to do.

And then my last question is, you dropped something on the press release about some global food allergen regulatory efforts. I don't know if that was in prior releases but it caught our attention. Could you expand on what some of those regulatory efforts are around the world? Thank you.

Well, I think it's just around the world countries are beginning to see the importance of food allergens. There's hardly a day goes by that you don't hear about some disasters or somebody that died because he ate something that he didn't know that was in the food. Those are probably way more the lethal side of it is it's much less of a problem than the debilitating side. And I think some of us had the few extra birthdays or all of a sudden say, you know, I can't believe – I don't believe I can drink as much milk as I used to. So, those allergens, I think, developed over time and it's become more important is processor's look to make sure that if it's in the product, it's on the label.

Yes. And I agree with Jim. I don't think it was anything that was a fundamental change. I think what we were trying to convey there was that across the world, this continues to get more and more pressed and continues to get more and more interest from governments that they need to be paying attention to this.

Got it. Okay. Thank you, guys.

I'll talk with our copywriter. He needs to do a better job.

Our next question is from [Paul Knight] from Janney.

This is Mike Gokay on for Paul Knight, actually. Quick question, what percent of your revenues are Europe and what was the growth rate for the quarter and the year overall? And then specifically, what was the growth rate for your genomics?

You were a little quiet. Can you speak up? I'm not sure we've got all the questions.

Can you hear me now?

Yes.

So, what percent of your revenues are Europe, and then what was the growth rate for the quarter and the year overall? And then, specifically, do you --

[Indiscernible].

What was the growth rate for European genomics?

Well, we can't tell you Europe overall because Europe reports in two different ways. In Europe operations, as everything in about 35 countries over there that relates to food safety, but we've got a lot of animal safety products that get reported to the animal safety side. So it would be difficult for us at least at this spur of the moment to tell you, it's like going back country by country search as to which ones came out of Europe and what your definition of Europe. Our definition of Europe is all European Union. I can tell you that the Neogen Europe – I think Steve can you give the Neogen Europe operations where I was last week are up considerably. Steve can give you that number. But it does not equate to our total sales, total revenues derived from Europe. Steve, you got the - I don't have it lying before me. I should have it off the tip of my tongue. I know last year, the FY 2018 year, I was with our management team over there, and we were all – we drank one little extra shot of good single malt whiskey to say that we were 102% of budget, 113% at prior year, I think. So those are approximately correct. But that's just for the Neogen Europe upgrades. And we got about 240 people over there now. So, between what we have in – they're headquartered out of Neogen Europe in Ayr, Scotland and that includes the two operations that we've got in there in England.

Yes. And that was about a 23% increase for those three operations last year.

Did you get that 23%?

Yeah. I did. And then how are you looking at potential expansion opportunities for your facilities in Brazil and Australia in terms of genomics?

Well, from genomics, Australia just got started. I think it's been on board for eight months. A lot of that - there was a lot - a number of reasons for putting in that Australian operation, all of the rules that the chief business was in Australia was actually coming back to what we're doing in Nebraska. Now effective this month, they will run all of their own stuff instead of sitting it out in the back. But there's a lot of opportunity, not just in Australia, but we'll reach down to New Zealand. New Zealand is still one of the major dairy producers and then there is a lot of dairy genomics work that we'll do to both Australia and New Zealand. And Steve's working on – I mean, John's working on the Deoxi operations in Brazil which fall into that. John…

Yes. And the way we look at – if you think about the way we do go-to-market, there's a lot of different ways to go-to-market on those and we take a multifaceted approach. We'll go direct to large producers. We work through trade associations to reach smaller producers. So we try to use a multichannel, multidiscipline approach to reach those customers because that country is so big, to try to do that on a direct basis is very challenging. So you've got to go with a multidisciplinary approach.

John, can you warn the audience? Somebody's slipping through mute. There's so much background. I'm not sure people can hear us. Can you handle that, operator?

All lines are muted except for yours and the current questioner's.

I think it's the current questioner. Let's cut this line.

And we'll now go to David Westenberg from C.L. King.

Thank you for taking my question. So, the veterinary instrument and disposable revenue seem to be way up compared to other quarters. And now looking back, I see it always kind of strong in the fourth quarter. So, it's not true to me exactly what the seasonality is there, but is that what we should always expect? Is that fourth quarter is the strong one in veterinary instruments and disposables?

Yes. Probably not. That's an interesting question I haven't looked at. At one point in time, it was pretty strong in calving season, so we did a lot of stuff going into the winter when we were looking at spring calving on bovine side or lambing or whatever. And then the fall calving crop putting all cash has started to hit the ground in September/October. But now, we have feral pigs every day of the year. We deliver new dairy calves and milk cows every day of the year. So, it's not really all that seasonal anymore. I suspect there's a little bit of seasonal impact. I'm not exactly sure what that might – fourth quarter, I don't know. John, what that fourth quarter was. We do some OEM manufacturing for a number of vaccine companies. We supply a syringe for our disposable products that they can use in conjunction with their vaccine as a promotion. We could have some of that in the fourth quarter. John, do you remember?

Yes. I think that's what that is Jim, is if you think about that seasonality in the fall, we're backing it up because we've got to make it for our customers earlier, whether it's getting it to the distributors to get in the pipeline or to Jim's point, making those products that are then attached to their vaccines that then go out to the customers. So, we're probably ahead of the season because it's going into the pipeline. Q – David Westenberg: That's very helpful. And then I apologize for my ignorance here. You mentioned the tariffs in China and you mentioned its effect on soybeans. But I guess I'm confused about what the impact might be, revenue-wise, for your products with the change in, say, prices in soybeans. So, can you kind of maybe give us a little bit more color on how to understand those tariff impacts on soybean prices or any other crop in terms of what the prices of the crops do and how we should think about that impact on your revenue?

It's a good question. What does golf balls have to do with the sale of commercial egg? Nothing. But it's general farm income and the fact that I thought it was interesting that, for the first time ever, the market, the U.S. farmer was saying the soybean business is going to be pretty good, and we planted more soybeans than we did corn, and then all of a sudden we're looking at tariffs. It's a fight back and forth on tariffs. It's going to affect general farm economy. It affects a lot of things. But I don't think it's going to affect food safety that much. It's going to impact that and what's the little quiver that's going on in meat production. We're going to see a reduction in overall chicken broilers produced before the end of the year, and that will cut back some of the rodenticides we sell and few things like that. But it’s just a part of what's happening, and I think it's also important for us to have a barometer to know what's going on. We sell a lot to the dairy industry. And just this morning, the governor of Wisconsin announced that they were putting in - he was instituting a Blue Ribbon Committee to figure out what to do about low dairy prices over there. And all of that, somewhere along the way, impacts what we do and how we sell. On the direct side, we sell a lot of our product to China, and we buy a lot of product to China. We've got 40-foot containers crossing and passing each other, coming across the water on a weekly basis. Right now, none of those seem to be impacted. And we hope there won't be, but at in my - I said in my comments, there might be a little place here or there that we might get caught, but we'll play that hand if it gets dealt to us, and it won't be the first time.

So, based on the pulse on the industry kind of commentary something to watch for generally speaking then? Okay. All right.

That's right, David. It is not a direct correlation. It's just we're looking at the general health of those customers, and it's really looking at a barometer of end customer over profitability to try to understand what the market is doing.

We've got a number of analysts that kind of take care of and kind of watch that same thing, too, that are close to the food production industry.

No. I'd rather have that commentary than not, so I really appreciate that anyway. So just maybe the international theme here, congrats on good growth in India and China. I know you're making a long-term investment, and you've said in the past that's been a little bit of a drag in terms of operating income. So what's your anticipation on a go-forward basis? Do you see that as kind of a hockey stick kind of revenue? And if that is a hockey stick kind of revenue, can that be – maybe a margin expansion play in maybe the next near term or half decade or so on?

I think, long term, you're exactly right. Now, when that switches is that's the question because what we've found is to get in the markets early is a real strategic advantage. And as those middle classes grow and demand more protein and they demand higher quality food, that's when we really see a big uptick for our products, but we want to be there ahead of the curve so we can establish ourselves, our brand and our solutions within the marketplace early. So, we are strongly committed to those two markets. Having just got back from China and spending a week there and visiting customers, I'm more excited than ever about our ability to continue to grow and find opportunities there. And I think it's the same with India, we had the team in and we really spend a lot of time in really understanding what can we offer those markets today that they are going to allow us to really expand our product portfolio when this market starts to move.

Our next question is from Bob Chernow from RBC.

Yes. I have a question. I have been following your company and I own a lot of your stock. One thing that you do very, very well that very few companies do is to make acquisitions and integrate them into your system. Can you give us the secret sauce on how your approach is when you buy new companies?

No, I couldn't tell you that that’d be giving away the secret. I don't think there is any secrets, but thank you for the confidence that you have in owning our stock and thank you for the compliment of what we're doing. But if you know your market, know the players, it's really not that hard. The secret has always been how well do you integrate them and how well do you buy them, and we’ve probably at times, even during this past year, been a little slow on the uptake in buying to make sure that we were doing what we needed to do on the integration side, and I think that’s to be expected. And I'll give you some examples of how we bought a company here and a company there fully intended to one day bolt them together, and those things are happening. So, it's I think just – we're in really kind of pretty blessed situation. We've got an opportunity to pick up products that we don't have to make ourself, and we've got an opportunity to expand our geographic coverage with the products there by way of acquisition. So it's kind of – it’s fun and kind of easy.

And, Bob, Jim is being modest. But I will tell you as the new guy, I was very impressed with the discipline the organization has not only at looking at the acquisitions but then understanding the capabilities of the team members to quickly execute an integration plan and having a plan ahead. So, you can have a great plan, right, but you got to be able to execute, and I think that's one thing under Jim's leadership that we're going to continue that the team has done an excellent job of.

[Operator Instructions] And we do have a question from Kevin Ellich from Craig-Hallum.

Just a couple of quick follow-ups. I guess, John, starting off with the U.S. dairy market, which is still pretty soft and weak, wondering how sales of BetaStar Advanced have been coming along since the launch in February.

We continue to make sure we push the – the big challenge with BetaStar is it’s not just the product that's changing the process of the customers. So we've done a tremendous amount of demos. We have to work with government LEOs to make sure they're on board. So I'm pleased with the progress we've made. We always can continue to strive to get new customers, and that's what we're doing. But we're really, really working hard, and I think the teams have got a great progress. And the advantage of it's not just BetaStar but it’s Raptor. It's that platform that allows us to be very, very different than our competitors and allow us to provide a solution that nobody else can provide in the marketplace.

But has the weak dairy market affected your sales in U.S.?

I think, Kevin, you’ve got to remember, that's not really going to the dairy producer. That's going to the dairy processor.

Okay.

So that's where it's a little bit different. That's going to direct to the processors. So they've got to test the milk and we've got to show that we're a better solution.

That milk might be cheap, but you still got to test it.

Yes. Exactly right.

And then, John, in your prepared remarks you called out Neogen Europe and Neogen Brazil. And I think, did you say 54% in Brazil or did I misunderstand that comment because in a press release it says Brazil revenues were up 12%?

That includes the Rogama revenues because we had about half year for Rogama.

So I included the whole thing which was 54%, but that is taking into account that the action Rogama were half years.

Okay.

That makes sense, Kevin?

That was added by acquisition, not organic..

Got it. Okay. Thank you.

He still wants the mic.

Okay. Sounds good, guys. Thanks.

Okay. Well, they’ve given me…

He’s going to turn it back to you.

Okay. John, you’re giving me the last sign. I think it must be now towards wrap-up, is that right?

That's right. Mr. Herbert, I'll turn it back over to you for closing remarks.

Okay. Well, it's been fun this morning. Thank you for the questions. Thank you for the continued support. And I believe that our performance might be a little indicator of future performance, too. So I feel pretty good about that. That’s something I said, did you really want him to say that? I guess I'm like some other people. Sometimes I say things in public I shouldn’t, but I do it anyway. So at any rate, thank you for the morning. Thank you for the continued support. I'll remind you those of you who didn't have it already heeded it, we will have an investor picnic. I think our 36th annual picnic for investors and analysts will be here in Lansing at the company headquarters on Thursday starting at 4 o’clock. So, if you can make it, if you're in the area or you want to get here, you don't even have to register now. It’s too late to do that. Just show up. We're going to have plenty to eat and love to see you. With that, thank you for the support you provided for another great year and we'll look forward to talking to you in about another three months, I guess, or less than that, and see you all . Thanks, guys.

Thank you. Ladies and gentlemen, that concludes today’s conference. Thank you for participating. And you may now disconnect.