Neogen (NEOG) risk factors, FY2025 10-K

RISKS RELATING TO THE TRANSACTION WITH 3M CORPORATION

1. 01We may not realize the anticipated financial and other benefits, including growth opportunities, expected from the 3M Food Safety merger transaction
2. 02The integration of the 3M Food Safety business with Neogen presents challenges, and the failure to successfully integrate the 3M Food Safety business could have a material adverse effect on our business, financial condition and results of operations
3. 03integrating certain manufacturing, information technology, purchasing, accounting, finance, sales, billing, human resources, payroll and regulatory compliance systems
4. 04Pursuant to the terms of the Transaction, Neogen Food Safety Switzerland will be restricted from taking certain actions that could adversely affect the intended tax treatment of the Transaction, and such restrictions could impair Neogen’s ability to implement strategic initiatives that otherwise would be beneficial

RISKS RELATING TO OUR BUSINESS AND INDUSTRY

1. 05Tariffs and other trade measures could adversely affect our results of operations, financial position and cash flows
2. 06We are subject to risks relating to existing international operations and expansion into new geographical markets
3. 07fluctuations in foreign currency exchange rates
4. 08We have material weaknesses in our internal control over financial reporting, and if we are unable to improve our internal controls, our financial results may not be accurately reported
5. 09Our business strategy is dependent on successfully promoting internal growth and identifying and integrating acquisitions
6. 10We rely significantly on our information systems’ infrastructure to support our operations and a failure of these systems and infrastructure and/or a security breach of our information systems could damage our reputation and have an adverse effect on operations and results
7. 11Disruption of our manufacturing and service operations could have an adverse effect on our financial condition and results of operations
8. 12We rely heavily on third-party package delivery services, and a significant disruption in these services or significant increases in prices could disrupt our ability to ship products, increase our costs and lower our profitability
9. 13Our dependence on suppliers could limit our ability to sell certain products or negatively affect our operating results
10. 14Our business sells many products through distributors, which presents risks that could negatively affect our operating results
11. 15If we are unable to develop new products and technologies, our competitive position could be impaired, which could materially and adversely affect our sales and market share
12. 16If we fail to maintain a positive reputation or are unable to conduct effective sales and marketing, our prospects and financial condition could be adversely affected
13. 17We could lose customers or generate lower revenue, operating profits and cash flows if there are significant increases in the cost of raw materials or if we are unable to obtain such raw materials or other components of our products
14. 18Changes in domestic and foreign laws, regulations, policies, and enforcement initiatives increase our costs of compliance and subject us to increased risk
15. 19Differences in and changes to tax rates in the jurisdictions in which we operate and unanticipated outcomes with respect to tax audits could adversely affect our business, profitability and reputation
16. 20A deterioration in our future expected profitability or cash flows could result in an impairment of our recorded goodwill and intangible assets
17. 21The markets for our products are extremely competitive, and our competitors could use existing resource advantages to our detriment
18. 22We are dependent on the agricultural marketplace, which is affected by factors beyond our control

RISKS RELATED TO LIQUIDITY, INDEBTEDNESS AND THE CAPITAL MARKETS

1. 23We have incurred substantial indebtedness and our financial condition and operations may be adversely affected by a violation of financial or other covenants
2. 24competitive disadvantages relative to other companies with lower debt levels
3. 25The outcome of litigation and other legal proceedings in which we are involved is subject to significant uncertainty, and we may incur losses in excess of what we currently anticipate, which could be material
4. 26Our quarterly and annual operating results are subject to significant fluctuations
5. 27The market price of our common stock could be highly volatile
6. 28Our business could be adversely affected by fluctuations in the global capital markets
7. 29We have no current plans to start paying dividends in the near-term
8. 30Our success is highly dependent on our ability to obtain protection for the intellectual property used in our products
9. 31Certain of our products could be the subject of patent infringement challenges
10. 32Obtain licenses to the infringed intellectual property, which may not be available to us on acceptable terms, or at all
11. 33The industries in which we operate are subject to substantial governmental regulation
12. 34Failure to attract, retain and develop personnel, including for key management positions, could have an adverse impact on our results of operations, financial condition and cash flows
13. 35Our business may be subject to product or service liability claims
14. 36Changing political conditions could adversely impact our business and financial results
15. 37Climate change, or legal, regulatory or market measures to address climate change could materially adversely affect our financial condition and business operations
16. 38Our business could be adversely impacted by an inability to meet the expectations of our stakeholders related to environmental, social and governance (ESG) objectives
17. 39Tax legislation could materially adversely affect our financial results and tax liabilities