Q3 2020 Earnings Call
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Thank you for your patience and please standby your conference will begin to me.
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Welcome to their marriage and third quarter results Conference call. My name is held back I hope you're operator for today.
At this time all participants are in listen only mode later, well conduct a question and answer session.
During the question and answer session. If you have question. Please press Star then one on your Touchtone phone.
I will now like to turn the call over to Mr., John <unk> CEO.
Sorry like yellow.
Thank you Hello.
Good morning, welcome to our regular quarterly conference call for investors and analysts today, we'll be reporting on the third quarter or 2020 fiscal year, which ended on February 29.
As usual some of the statements made here today could be terminals forward looking statements. These statements of course are subject to certain risks and uncertainties.
Actual results may differ from those are we discuss today the rest associated with their businesses are covered and part in the company's form 10-K as filed with the Securities and Exchange Commission.
In addition to those riera joining us for life Telephone conference I also welcome those of you joining us via the Internet.
Following our prepared comments. This morning, we'll entertain questions from participants were joined as life Conference.
I'm also joined this morning by our Chief Financial Officer, Steve Quinlan, who will provide details on our results for the quarter.
Before we get started I want to start and say what I believes the most important thing you need to know about Neogen Corporation. During this difficult time.
We were built to respond in times of crisis, and that's what we're doing right now.
We've done our best to assist the broader civic efforts to combat cold at night team by making her sanitizers and disinfectants available outside of our traditional agriculture in veterinary markets.
At the same time, our entire worldwide team has continued its outstanding work to help ensure the global food supply is safe and is plentiful as possible.
Our mission matters today more than ever.
That's the world fights through this crisis to eventual recovery. There are few things more important than a continuing safe and plentiful food supply.
Now looking what about the quarter.
Starting in early January we completed four acquisitions, one in Argentina on in Uruguay, Italy in Australia.
With these acquisitions were strategically expanding our international reach.
In each of the four countries or further enhancing our penetration of these rapidly growing assessment markets.
As we can now directly sell our entire portfolio food safety animal safety in genomics products in most countries.
At this point I'll turn it over to Steve to provide more color on the quarter.
All right. Thank you John.
Earlier today Neogen issued a press release announcing the results of our third quarter, which ended on February 29.
Revenues for the third quarter increased 2% to 99.9 million from the previous years third quarter of 97.7 million.
Now this third quarter marked the 112 quarter in the past 117 that Neogen has reported revenue increases as compared to the same quarter in the previous year.
This record, which were obviously proud of has now spanned over 28 years and all consecutive quarters in the last 14 years.
I mean your day basis fiscal year 20 revenues have also increased 2% to 309.1 million compared to last years 304.4.
Net income for the third quarter was 12.2 million or 23 cents per share compared to 13.1 million or 25 cents a share a year ago.
Dave net income for the first three quarters of fiscal 2020 was 43.1 million or 82 cents a share compared to 44.4 million or 85 cents share for the same period last year.
During the quarter the impact of currency fluctuations on a revenues with minimal reducing our comparative revenues by approximately 360000 for the quarter.
The pound in the peso worried stronger against the dollar than the prior year quarter, while the Brazilian Ray I was 10% lower than this time last year against the dollar.
For the year to date and a neutral currency environment revenues would have been approximately 2.5 million higher than we actually reported.
With the spread of covert 19 across the world currency markets have been extremely volatile as we've moved into the fourth quarter and I would expect a larger adverse impact from currency translation this quarter.
We do continue to hedge a portion of our for balance sheet exposure for currency risk.
Overall revenue growth at 2% for the quarter was disappointing.
We were forecasting a 5% to 6% growth through the first two months in the quarter and then February was extremely soft, particularly for our diagnostic test kit businesses in North America in Europe.
Overall revenues in the food safety segment were 1% below last year's third quarter.
Revenue highlights in the food safety segment includes strong growth and bio security products, such as cleaners, disinfectants, Rodenticides and insecticides sold into international markets as customers dealing with African swine fever, and cobot 19 have realized the importance of effective biosecurity programs.
Protecting the food supply.
Natural toxins and allergen test kits sales increased 4% in the third quarter, while our Accupoint product line designed to help monitor environmental environmental sanitation rose, 5% for the quarter.
Offsetting this growth were lower sales of culture media products down, 7% due to lower end market demand and order timing and sales of drug residue test kits decreased 47% compared to last year's third quarter, resulting from lower demand at our European distributor.
As we discussed on our previous call we modified our contract with this distributor on January 1st to eliminate their exclusive distribution rights across most of the world and we're now selling this product line directly to end customers utilizing our own European Salesforce.
We believe it may take some time to regain our market share and began to grow this business again.
Internationally, we had some puts and takes.
First the acquisitions, we completed during the quarter to purchase three of our distributors and a supplier key raw materials gave US 1 million an incremental revenues. These acquisitions enhance our position in markets. We believe has significant growth potential and we're excited to bring them into the neogen full.
Our European business grew 5% overall on the strength of a 24% increase and cleaners, and disinfectants and veterinary instruments offset somewhat by a 9% decline in culture media products due to orders delayed into the fourth quarter and lower demand.
Genomic services conducted out of our Scottish operation Rose only 2% due to sluggish conditions in the poultry market.
Sales in Brazil declined 16% for the quarter, primarily from the forensic test kit business due to the previously discussed loss of the large commercial lab customer that move to an alternative technology platform earlier this year.
This resulted in an 860000.
Dollars revenue shortfall this quarter.
Genomic services in Brazil declined 450000 for the quarter due to a large sale in the prior year, which did not recur.
Partially offsetting these declines was the final shipment of a non recurring sale of insecticides to a government agency for about 420000 this quarter.
Sales at Neogen Latino America increased 15% during the quarter as an 11% increase in diagnostic test kits was enhanced by a large sale of Rodenticides in Mexico.
China had a revenue increased 38% for the quarter led by robust sales increases of cleaners, and disinfectants to help and fighting conditions that have led to outbreaks of African swine fever, and cobot 19.
Our international revenues were 40% of our overall sales for both the quarter and year to date essentially the same as the prior year periods.
Revenues for the animal safety segment for the third quarter increased 6% and were led by a 14% increase in genomic services.
This was primarily the result of continued penetration into the domestic companion animal service space increased volumes in the domestic horse on market and growth in the ship testing market in Australia.
Even with the devastating that devastating wildfires that affected that country throughout the quarter.
Other highlights during the quarter were 25% increase in Rodenticides on the strength of successful retail marketing programs.
Water treatment disinfectant sales up 31% on share gains in the swine market.
And insecticide sales rose 5%.
Partially offsetting these gains were lower sales on our animal care, certain cleaners, and disinfectants and veterinary instrument product lines due to high inventory levels at our largest us distributors. The result of continued weakness and end user sales.
Gross margins were 45.4% for the quarter compared to 45.7 in last year's third quarter.
The change in gross margin is due primarily to change and product mix, resulting from a higher proportion of sales from animal safety segment, which have lower gross margins and products sold through the food safety segment.
Margins within food safety were negatively impacted by mix as well as strengthen international sales of cleaners, disinfectants and rodenticide relatively lower margin items.
Lower margin items within the segment.
Lower sales of higher margin products, such as forensic kits resulted in a 120 basis point reduction in margin percentage.
Margins were enhanced and the animal safety segment from strong sales of higher margin genomic services to the companion animal market, resulting in a 90 basis point improvement in that segment.
Our quarterly fluctuation in our gross margins are common in our business due to mix and the wide range of margins in our product portfolio.
For the year to date margins were 46.8% first 46.4% last year.
Operating expenses overall increased 8% for the quarter and were up 5% for the year to date.
Sales and marketing expenses rose, 6% for the quarter on higher personnel related costs increased shipping regulatory and product registration expenses for the year to date. These expenses are up 1%.
General and administrative expenses were up 8% for the quarter and are up 7% for the year to date.
The increase for both the quarter in year to date is due to higher stock based compensation expense personnel costs and legal and professional fees, partially resulting from acquisitions completed during the third quarter.
Additionally, incremental DNA expense from the acquisitions was 260000 of the increase.
R&D expenses increased 18% in the third quarter and are up 22% for the year to date. The result of development costs and outside services relating to new products expected to be launched in late fiscal 2020 or early next fiscal year.
Operating income for the quarter was $13 million compared to 14.6 million in last year's third quarter.
Expressed as a percent of sales operating income was 13.1% compared to 15% in the third quarter year ago.
For the year to date operating income was 47.6 million or 15.4% of sales compared to $49.4 million or 16.2% of sales last year.
The decline in operating income for each period was primarily the result of the increase operating expenses.
Other income for the third quarter was $1.2 million with interest income of 1.6 million offset by currency losses of about 400000.
Cash and marketable security balances have increased by 60 million during the year.
However yields have declined from 2.4% at the beginning of the year to about 1.5% at the end of third quarter and if obviously dropped significantly since then.
Our effective tax rate was 14.4% in the third quarter compared to 21.4% in the third quarter last year.
For the year to date, our effective tax rate is 15.6% compared to an effective rate of 17% in the prior year.
For each period, the primary difference between the 21% statutory rate and the reported effective rate is the benefit resulting from the exercise of stock options.
Additionally for each comparative period, there have been refinements to our tax calculations relating to certain areas of the tax reform Act of 2017.
The company generated $19.8 million in cash from operations in the third quarter and has generated 60.3 million for the year to date.
We spent about 9.7 million on the four acquisitions, we closed on third quarter.
End of invested 16.3 million in property equipment and intangible assets this year.
Inventory balances have risen 4% since our prior year end the higher balances are reflective of an inventory build in Europe for profitable Brexit disruptions and lower than anticipated sales levels in the quarter.
Our third quarter operating results were clearly not what we have planned.
We've now entered into a very uncertain period in the near term as we deal with the covert 19 crisis.
We've taken a number of steps to protect our employees and our business as we manage our way through this and personally there is no team I'd, rather be working with than our team of nearly 1800 employees.
I remain very bullish about our future.
Now I'll turn it back to John for some additional comments.
Thanks, Steve.
Well, we fell short of our performance expectations in the quarter Neogen has never been better positioned with the right products solutions and team members for our worldwide customers.
Neogen is unique in that we keep food animals and people save from behind the farm gate, all the way to the dinner plate.
We are well positioned globally to assist our food industry partners to produce the best safest products possible.
To assist our animal care partners, and providing world class animal husbandry, and bio security practices and their operations.
Over the years, we've extended our bio security portfolio to include cleaners, Disinfectants, Sanitizers personal protection equipment and more.
This bio security portfolios, given us ability to strengthen and extend our relationships with our customers.
As we can also provide them with products to stop contamination issues before that appears positive results in one of our diagnostic tests.
We are well position financially to weather, the continuing and expected threats to the global economy in 2020.
With a clash with a cash and investment balance or about 328 million no debt and strong free cash flow.
We feel good about the robustness of our international supply chain.
And our ability to secure the raw materials, we required to produce or products.
We are necessary, we have secured alternative suppliers to ensure the continued availability of critical raw materials.
To do our best to maintain a normal product supply to our customers. We've executed many initiatives in an effort to keep our global workforce as safe and healthy as possible.
For example, weve halted travel suspended in person meetings.
Eliminated enter building travel.
Instituted remote work directives split critical teams by location and ships and our identifying new employees by location.
If and when we need additional manpower later.
Last week, the White House issued covert 19 guidelines are reinforced where we already knew.
Neogens employees work and industries that are essential to the us and the world.
As the guidelines states employees at companies such as Neogen have a special responsibility to maintain our normal work schedule.
We simply can't wait this went out on the sidelines as a company.
Our food safety and bio security expert stand ready to help anyway, we can.
You Sta Secretary say pretty recently, thank those on the front lines of the food supply, calling them heroes and I agree with them.
More than ever we all depend on folks stocking the shelves of our local grocery stores the truck drivers foodservice workers farmers and ranchers food safety inspectors and Neogen employees, ensuring the food we either safe.
Sure the albeit many questions for Stephen I'll stop at this point, we're going to answer any questions you have.
Thank you we will now begin the question and answer session. If you have a question. Please press Star then one on your Touchtone phone.
If you wish to be remarks from the question Keith Please press the pound side or the cash.
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Once again, if you have a question. Please press Star then one on your first on your Touchtone phone.
Please standby.
Allow parties Turkey.
We have a question from Paul Knight from Janney.
Hi, guys. Thanks for the question.
Regarding your genomics business US could you talk about you are adding some capacity.
And.
Where you are with the growth rate you asked for starters and then secondly on why Europe slow growth, what we going on with Europe growth of only.
Thanks.
Sure. Thanks, Paul Yes, the us growth was about 14%.
For the quarter and we are.
Nearing the end of that expansion.
Been Lincoln.
So we're continuing to to push that out and we need that capacity. Because this is our growth market, we're going to continue to see move.
The the slowdown in Europe was mainly driven by one customer on the poultry side.
And.
We keep thinking about.
How we're going to manage and a number of international countries. It wasn't an issue around them wanted to doing testing. It was getting samples because we are having issues with some of the.
Postal delivery services.
So.
We continue to work through those so we were were monitoring that but right now we feel pretty comfortable.
And then you know the operating margin, obviously dipping down to 13.1%.
You know one year obvious I guess, you're having do invest in alternative distribution channels.
When do those comps get easier or how should we think about operating margin over the next calendar year.
Yes, I think there's there's three things that I saw I mean, one that really stood out to me or three things within was the R&D spend and Steve talked about R&D going up and.
And we had.
Two we have two major projects that we've been working and we brought our new raptor equipment about a year ago.
And very shortly we're going to have two new pieces of equipment for our.
Two significant other platforms for our business.
So once those come off you're going to see quite a bit of a drop off on spend the other is.
Something you'll see coming out this way, but we are launching our new York ecommerce site.
And we've put a significant amount of time and energy.
End of this site, we're really excited about it timing could not be better.
Not that we plan and the timing could not be better with that.
We're really excited about kind of the state of the art.
Camera system, we're going to have.
Compared to the system. We have today. So those are three big projects that were driving expenses I think youre going to see.
Fall off here going forward.
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Regarding where we want to be and in a normal operating cycle type thing.
Feel very comfortable getting.
Above the 16% 17, you'd always pushing to Jim's number 20.
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In today's environment, we are.
Watching very very carefully.
A number of different things the raw materials coming in from.
Our.
Partner vendors.
The health and safety of our employees to make sure we have workers to produce.
And demand from our customers.
And right now.
All three look pretty good and Steve mentioned that February was soft in it surprised ourselves off that was.
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In March I think Steve will tell you surprises us and how.
Strong it as compared to what we were expecting this type environment.
Okay. Thank you.
We have a question from David Westenberg from Guggenheim Securities.
Hi, Thanks for taking the question and I had a lot of trouble getting on to site. This already got on asks can you talk about how much of China was actually maybe African swine fever versus I think you called that out as mostly on.
Totally 19, but was there also impact from from a rebound from asaph.
Yes, no so.
I think if you think about the timing of the quarter. The majority of the disinfecting sales that we had in the quarter was for African swine fever.
Got it now we do expect David that.
With.
Over 19, we have.
We have two products currently registered in the us with Immerging pathogen claims.
Which cobot 19 falls under we have two more within EPA. Some middle right now that we expect are going to get fast track.
We have three products.
That have corona virus levels.
So with Cobot 19, being a current virus, we feel very comfortable that those are effective but cobot 19 falls under an immerging pathogen label. So.
We continue to push registrations around the world.
To help those customers worldwide get the products they need.
To clean and sanitize.
Across and I think I talked about this a little bit was.
No we expanded our facilities for the manufacturer of Sanitizers, because we opened that product group across the marketplace. We had so many food safety customers.
Calling and asking I mean.
We had our lawyers call us and say, we can't get a hand Sanitizers can you guys held a local hospitals are calling about PPD. So we're doing everything we can to try to open up our resources to help the broader community.
And it's.
It's something I'm really proud the employees are doing I mean, the group is.
As working tremendously hard.
We have emergency response meetings every morning and every evening.
Teams are engaged and there is a real sense of purpose here.
That's great.
And then just for clarification I mean, I would have to assume that that maybe 100% of your business would be considered essential business.
But it by terms of.
Shelter in place et cetera.
Yes in every country, that's put a shelter in place Neogen has been exempt as essential.
Industry.
Perfect. Thank you and then maybe if we can talk about potential for on recession or or just plain economic slowdown.
Do you see our or what are the common changes you see in food consumption.
I mean, I would think that maybe people switch to cheaper proteins and how might that impact you and then.
That kind of follow up to that.
You know does things like raised without antibiotics or some of your products around testing for Allergan does that may become a little bit less essential or maybe even more essential I'll. Just give you can remind us about the dynamics that happened during recessions in terms of food consumption sure David.
I think and this.
And this market today, what we have seen the bids.
And this is a very broad statement, but the majority of our products.
Our sold to food processors sell into grocery stores.
We don't sell a lot of products into.
Retail or into restaurants, so as demand moves from.
Restaurants to grocery.
In broad terms, we feel like that could be a tailwind for us.
Around general Recessions, you do you see people end up going to lower protein.
Lower cost protein, so you'll see a down move from beef the port pork chicken.
But I'm not I'm not sure.
Sure, what's going to happen with that moving forward I think this is.
We're seeing right now is supporting behavior.
And we're seeing some stacking up across all proteins.
Im not sure what's going to happen I don't know of this is going to be.
As everybody is talking about as it's going to be Revera you.
On the return.
So.
I'm not comfortable kind of thinking through that piece on the protein side.
Got it.
Thank you for taking my questions, Yes, you're welcome David.
We have a question Mark Connelly from Stephens.
Thank you.
Two questions first up how should we think about where we are.
And with the secular decline in regular Gary versus the alternative delivery growth are we getting to a point where the regular dairy losses are beginning to slow the point, where the alternative can actually provide us with an officer or is it still too early.
I think it's still too early to say and again with.
It's so hard to look right.
Right now Mark with.
The way this market isn't just subs.
Flux in fluid terminal I mean as at the store the day and again on a bulk was three bucks and I've.
General Motors $1.20 I mean so.
I think I think what your.
In a normal state.
I think with the input prices coming down I think the dairyman.
Could start to do better, but it's not a normal state some unclear as to Honda.
Kind of forecast that forward does that make sense.
No that's that's necessary comparing just we're starting to see.
Some indications of regular dairy decline since slow.
That doesn't mean, you're going to see yet.
Just a second question on on the.
The the new product from we're still seeing a lot of venture capital and private equity money moving into new and innovative food companies that has not slowed down in the last couple of weeks, presumably some of that money is being forwarded to provide bigger cushions.
But have you seen any pull backs in demand from some of your smaller profit.
Food food companies.
No.
Nothing.
Okay very good ticket.
We have a question from Kevin Ellich from AIDS research.
Hey, John.
Thanks for taking the question.
I guess.
Made a comment about.
Some of the genetic test that believe.
Seeing some issues with postal delivery kind of slow there wondering if you're seeing any of their supply chain issues.
You know Kevin we.
Thanks for question, we got.
We really got on the supply chain.
Probably in mid January when this hit in China, because we had so with our workers there and.
For the good news is just for everyone.
We today, we have no confirmed cases of over 19 with Neogen employees, which I'm really excited about.
But when we saw that happened in China, we guys. We brought everybody home and we're really watching closely what was going on.
With that supply chain, because we were getting very very nervous about how long.
Ted if China had a long delay or they've said that factories for long time initiative on the ports.
Everybody, who is going to be in big trouble. So we really stayed on it.
Now.
We've we've seen that loosened up.
We saw China Reserve Kennel returned back to normal faster than what I was expecting.
And because we're early we got our orders and so we had shipments coming across.
Kind of a for the rest of the pandemic spread across the world.
So I feel pretty comfortable now again.
Im not going on what I feel comfortable today because I.
At least in my inventory stock.
But you know there's no say, what's going to happen if I have a critical.
If I have a critical supplier, whose workforce becomes effective NAFTA shut down for an extended period of time.
Thats going to be a challenge.
Right I don't have that today I think we've we've lived in there.
Inventories as best we can and we continue to find alternative suppliers as much as we can to.
To make sure we have the products for our customers.
Yes, the enough that thats great. Good to see that you guys. There are on top of that and then going back to David touched on African swine fever.
No from the smaller producers in China last year, we're starting to be populate the heard just.
Do you still think this year can be well I guess, a lot better than last year and then.
Also can you give us kind of your thoughts on any benefit from your genomics business to help replenish the swine herd in China, if you could see some tailwind there.
Yes, I mean I think.
Again.
For the smaller producer it's not.
They're not they're not thinking about that but theres still are they're very many large producers who used genomic testing in China. So, yes, we think theres an opportunity.
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So continue to help them signed and Republic as they want to make sure. They would have the REIT stock when they are resetting up these farms.
Im not sure I know.
Where that turns going to be I mean African swine fever still around.
It's just been overshadowed by overnight team.
And so yes, it bill it still there and it's still a threat and which is why we continue to.
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Get label claims.
Unfortunately, there was one laboratory in the World doing label claims are doing testing for African swine fever, and it was merely.
So that slow that down for just about everybody, but we're continuing to push that we're working a lot with different governments because now the governments are being a little bit more reasonable around some of their requirements were.
Before I would take us two years to get a license, we're hoping that we can see significant.
Reduction during those times because.
People need our products.
We are products that are efficacious, we have products at work and people need them and it's a shame if we can't do it because.
It takes two years to get a registration.
Sure.
And then last question for me John.
You guys have clearly been a little bit more active on the M&A front.
In the last several months.
What the changing environment, you guys had a great balance sheet.
Generating very good cash flow.
Just wondering if Canada changing landscape here has affected your capital allocation strategy.
I'm not sure I don't think it as Kevin I mean, we're still actively looking at opportunities everyday.
Then actually in this environment.
We're probably going to be more active.
Because there are some great smaller companies out there that maybe.
Are going to struggle because of cash flow issues and with our balance sheet, we might be able bill Wheeler.
We could be able to step in and help them.
That would allow us to have access to technology companies, where.
Four months ago, those play VC money nobody on it and in a little bit who's interested but.
Things are changing so we're being very very active and our.
M&A and business development.
Moves right now.
I think that makes a lot offense and let's hope that is it as of the recovery versus a year or as a tax losses and even a W. We don't want the half.
Anyway. Thank you Dave attractions, thanks, Kevin I appreciate it.
Yes.
I'm sorry line, if you haven't questions. Please press star one.
Your next question comes from Brian gains from Springhouse capital.
Hey, guys.
Can you talk about the organic growth rate was in the quarter.
Sure, Brian I'll, let Steve.
She hasn't had a question today. Thank you bye.
Including revenue.
Yes overall, the organic growth. So we had 2.2% growth overall organic was 1.1.
Okay.
And then I'm just having trouble maybe you can help US you guys. Obviously, so many moving parts.
Right now and you kind of mid February was a little weak March was better than you thought I mean should we be thinking.
Organic growth rate kind of stays in this range gets a little weaker gets a little stronger is there any way you can cut out frame things going forward with so many moving pieces.
Hi, Thanks.
Brian I think.
Excluding.
Some.
Major shock like I have an outbreak in a factor enough to shut it down or a supplier has an outbreak in the factory and shut it down.
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I feel comfortable with you know.
The rates, we were talking about I don't.
But its whole fluid right now I mean, we.
Honestly.
February seems like 10 years ago to me.
Right.
The meetings were having the things we're doing to try to.
Forecast, we wrote we're running six or seven different business scenario simultaneously, saying if this happens. This is what we're going to do if that happens. This is we're going to these two things happen. So.
Yeah.
What I can tell you is the team has on it.
We've got a great sense of purpose beverage employee believes and what we're Dillon.
We know we can help.
And.
As long as we can get to work and we got products were going to make it and get it to our customers.
Right. Okay. What would you say means your biggest concern the supply chain or is that the demand from your customers.
To all of them Brian it.
Well I am look we're looking at supply chain. We're looking at diameter employ employees are my point is out there my customer is healthy.
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Thats all of it I mean, we're looking at every single scenario right now than we and the thing that were due on that we have to do as we are over communicating were communicating with our customers on a daily basis, we're talking to our employees on a daily basis, we're talking with the.
All right.
Officials in the communities, we live and on a daily basis.
I was on the North America manufacturing call or in the week when we were talking about.
What is a critical industry and what isn't so we're really really communicating to make sure that people understand what we do is important.
And we've got so we are a critical industry, where we've also made sure that we've gone down on the supply chain.
To supply them with letters, saying their critical because for example by hand, Sanitizers were up 270% versus last year.
You would think that the plastics maker would be a critical industry.
But he is because I don't know the bottle to put it in I can't sell it.
So we have to provide to them.
This letter, saying that they are critical industry. So if they get pushed back that they need to shut down they have something that can go back to the group and so look we need to manufacture for this customer who is classified as a critical industry.
So we're doing all that.
Makes sense and you're in the sanitizing produce that goes that's going to.
Hospital channel are going to the retail channel or were.
Where did that in today today were today, we're sending it to our customers.
And that was a that was a cleaner and this effect in the hand sanitizer that we have marketed for veterinary clinics.
But now we're we're.
Growing production and we're we're bringing that into food safety, because we're seeing large customer share who just can't get cleaning supplies, so any ready to use.
In other we have that of Immerging pathogen.
Label claims were getting the customers in food safety I mean, this is really an opportunity were those customers didn't even realize we had that product portfolios. So.
That's us explaining one neogen, what we can do to help you in this time of need across your total.
Plant.
Right.
Thank you.
Thank you Brian Brian.
At this moment, we showed no further questions I would like to turn the call back to Mr. attack for final remarks.
Thank you Hello.
No.
It's been.
Challenging time, I think for all of Us I want to.
Extend all of you that I hope.
Your your family's loved ones I hope you all stay safe and healthy.
And the very I'd tell everybody in the every meeting I closed in every email I Sanders, please washer hands.
Thank you all for being on the call.
Thank you ladies and gentlemen, this conference today's conference. We thank you for participating you may now disconnect.
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